Michael Probst / AP
Economic output in Germany – Europe’s powerhouse – fell during the second quarter of the year by 10.1% compared to the same period last year. That double-digit decline is the steepest since that country’s Federal Statistical Office began tracking economic data quarterly half a century ago.
“It’s an astounding figure – down 10.1%,” writes Henrik Böhme, an economic analyst for the German state broadcaster DW. “Never in the post-war history in Germany has the country’s economy shrunk as drastically as the second quarter of 2020.”
The historic drop, which exceeds the 9% contraction predicted by economists surveyed by Reuters, occurred during a pandemic in which more than 200,000 Germans – just over 0.2% of the nation’s 84 million inhabitants – were confirmed infected with coronavirus, according to Johns Hopkins University Pandemic Tracking Website.
“The [10.1%] the figure is not surprising, “adds Böhme,” particularly at a time when factories have stopped producing, container ships have stopped loading, services could not be provided, trade fairs have ceased to take place and r the restaurants had to remain closed. “
The decline in German production over the last quarter, if calculated on an annual basis, amounts to 34.7%. That’s a sharper decline from the annualized plunge of 32.9% in the U.S. economy during the second quarter of 2020, the sharpest decline ever recorded for U.S. production. With more than 4.4 million known cases, the U.S. coronavirus infection rate of about 1.3% is more than six times that of Germany.
Despite the economic contraction, Germany did not suffer heavy job losses. Unemployment for June was 4.5%, according to the Federal Statistical Office, while the number of people employed fell by 1.4% compared to the first quarter of this year. .
German firms surveyed this month by the Ifo Institute in Munich have shown growing optimism about the economic recovery. This was reflected in an increase in the Ifo Business Climate Index from 86.3 points in June to 90.5 points in July.
However, Germany’s prospects remain closely linked to the impact of the pandemic elsewhere.
“The extremely export-oriented German economy is likely to suffer more,” observes analyst Böhme, “since important markets such as the United States, as well as countries such as Brazil and India, are not really leaving the -pandemic under control. “