German economy on recovery path after Covid-19 crisis

The German economy is currently on a “recovery path” after a slump caused by the Covid-19 crisis and is expected to “grow steeply” in the third quarter of the year, the country’s central bank Deutsche Bundesbank said.

“Current indicators suggest that this upward movement is continuing during the summer months” in Germany, according to the bank’s monthly report published on Monday.

In the second quarter, the GDP plummeted by 10.1 per cent compared to the previous quarter, the German Federal Statistical Office recently said.

It was the “largest decline since the beginning of quarterly GDP calculations for Germany in 1970”, reports Xinhua news agency.

In March and April, parts of the German economy had come to a stand-still as rising coronavirus cases led to a partial lockdown and the closures of shops and factories in the country.

The economic recovery began in May after the first restrictions were eased.

Germany’s expansive monetary and financial policy measures and the economic stimulus package worth 130 billion euros ($154 billion), recently adopted by the German government, would “provide additional support to the economy”, according to the Deutsche Bundesbank.

However, the bank’s economists noted that the German economy would “still fall considerably short of its pre-crisis level for some time to come”.

Forecasts for German GDP for the full year 2020 range between minus 6.3 per cent, the official government forecast from April, and minus 9.4 per cent which the German Institute for Economic Research (DIW) projected in late June.