After seeing her economy contracts by 2. 2%, Germany’s Chancellor Angela Merkel has announced that the country is officially in recession.
According to a statement by Destatis, the country’s data authority the economy’s decline reflects its biggest quarterly drop since the global financial crisis and its second-largest fall since German unification
“The corona pandemic hits the German economy hard. Although the spread of the coronavirus did not have a major effect on the economic performance in January and February, the impact of the pandemic is serious for the 1st quarter of 2020,” Destatis said in the statement
Germany is the latest country in Europe to enter recession during the coronavirus pandemic. Other countries in the European region have also recently reported horrific economic data. The UK’s economy dropped by 2.2% in the first quarter of the year. France and Spain shrank by 5.8 and 5.2% respectively. The Eurozone economy, as a whole, contracted by 3.8% in the same period.
And this, according to Artur Baluszynski, head of research at Henderson Rowe is the sharpest on record.
“The first quarter QoQ contraction of 3.8% is the sharpest on record.
However, Germany only contracted by 2.2%, and considering that France and Italy contracted by almost twice that much, we should expect to see some friction to arise when it comes to future contributions to any EU recovery structures” he said.
Data showed Germany’s household expenditures dropped sharply in the first three months of the year, while exports and imports saw strong declines in the fourth quarter of 2019.
However, general government spending and expenditures related to the construction industry had a “stabilizing” effect and prevented a potentially larger gross domestic product decrease, Destatis said.
Any economic performance achieved in the first quarter was largely in part due to 45 million people still employed in the region. This number is an increase of only 147,000 people, or 0.3%, compared to a year ago.
“The corona pandemic thus had only a moderate impact on the number of persons in employment in the 1st quarter of 2020, one of the reasons being that short-time workers are counted as persons in employment,” the statistics authority said.
According to the latest figures, Germany has 174,975 confirmed coronavirus cases and 7,928 fatalities.
