Germany’s economy shrank by 2.2 percent in the first quarter compared to the final three months of 2019, preliminary official statistics have shown. It’s the biggest slump in a decade for Europe’s largest economy.
Figures for the final three months of 2019 were revised to show a contraction of 0.1 percent, which means German GDP growth has been negative for two consecutive quarters, the technical definition of a recession.
The numbers are expected to get worse; Germany’s Statistical Office has forecast a ten percent plunge in GDP for the second quarter, depending on the success of lifting lockdown measures. More than 370,000 people lost their jobs in April alone due to coronavirus-caused shutdowns.
Recent data showed a 15.6 percent month-on-month decrease in factory orders in March, and a 9.2 percent drop in industrial production.
The German economy’s decline, however, is not as bad as in some neighboring countries. France and Italy have posted first-quarter contractions of 5.8 percent and 4.7 percent respectively.
The German government has already announced some 1.2 trillion euros ($1.3 trillion) to support the nation’s businesses. Finance Minister Olaf Scholz has promised a stimulus program in early June that will focus on investing in a “modern and climate friendly future.”
The country started loosening lockdown restrictions on April 20. Shops have now reopened; restaurants are gradually opening up and auto production has also restarted.
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