Estimates from five of Germany’s leading research institutes
- Q1 GDP likely shrank by 1.9%
- Q2 GDP estimated to contract by 9.8%
- On the year, German economy likely to shrink by 4.2%
- But government measures should fuel an expansion of 5.8% in 2021
The estimated 9.8% drop in economic activity for Q2 would be the most on record – in terms of quarterly data – with there being “considerable downside risks” to the projections still.
Among those risks are a slower-than-expected weakening in the spread of the virus and problems reviving the economy after the shutdown eases or a secondary outbreak.
I would say that one should just take these forecasts with a pinch of salt for now. We all know things are going to be bad in April everywhere around the world and conditions will continue to be more subdued in May and June as well.
But the hard part will be trying to quantify the changes in social behaviour after all this is said and done with once lockdown measures are slowly lifted over time.