German economy shrank 5% in pandemic year 2020

SourceArab News
SectorEconomy
CountryMiddle east

FRANKFURT: The German economy, Europe’s largest, shrank by 5 percent in the pandemic year 2020, ending a decade of growth as lockdowns wiped out much business and consumer activity. As dreary as they were, the numbers suggest consumers could be ready to unleash a strong recovery when the lid finally comes off. The statistics office Destatis said Thursday that only the construction sector showed an upturn as industry and services saw deep declines. Agriculture, financial services, real estate and information and communication suffered smaller drops in output. Industry fell 9.7 percent while services including cultural and sporting events, which have suffered widespread cancelations, fell 11.3 percent. Looking ahead, the stage could be set for a substantial economic rebound since consumers might be ready to spend once the pandemic recedes, having increased their saving rate to a historic high of 16.3 percent during 2020. Albert Braakmann, head of the group for economic estimates and prices, said consumption “could increase significantly.” In the fourth quarter, growth “roughly stagnated,” said Michael Kuhn, head of the GDP and output calculation group at the agency.

He said that since very little data was available for December, when the latest round of lockdowns hit, the agency was not making an ...read more...