The German economy suffered a record-breaking economic contraction in the second quarter as measures intended to stymie the coronavirus pandemic shuttered businesses and required …
The German economy suffered a record-breaking economic contraction in the second quarter as measures intended to stymie the coronavirus pandemic shuttered businesses and required consumers to stay home. The economy shrank at an annualized rate of 34.7 percent in the second quarter, worse than the stunning 32.9 percent decline in the U. S. On a nonannualized basis, which is the standard way European governments report their growth, the economy contracted 10.1 percent. That compares with the nonannualized decline of 9.5 percent in the U. S. economy. Federal statistics agency Destatis called the quarter-on-quarter decline in gross domestic product “historic” and far bigger than any slump seen during the 2008-2009 financial crisis. Economy Minister Peter Altmaier had warned earlier this year that the pandemic would push Europe’s top economy into “the worst recession” in its postwar history, ending a decade of growth. Analysts had expected a slightly smaller contraction of around nine percent on a nonannualized basis from April to June. Destatis said efforts to contain the COVID-19 outbreak had led to “a massive slump” in exports and imports, although government spending had increased over the period. The agency also revised its first-quarter data, saying output declined 2.0 percent from January to March, slightly better than the previously announced 2.2 percent. The worst of the pain may already be over. Thursday’s data “is nothing more than a look in the rearview mirror”, ING bank economist Carsten Brzeski said, expecting “a strong rebound” in the third quarter.
