Germany Ifo institute says that economy likely to shrink by 6.6% this year

Ifo weighs in with their view on the German economy

  • Economy likely to grow 10.2% next year
  • Q2 likely to see a contraction of 12.4% due to the coronavirus crisis
  • Some sectors including aviation, travel, hospitality and autos are expected to experience a longer recovery period
  • In case of slow normalisation lasting up to 16 months, economy could shrink 9.3% this year and growth 9.5% next year
  • In case of fast normalisation lasting up to 5 months, economy could shrink 3.9% this year and growth 7.4% next year
In other words, things are definitely bad this year with some expectation of getting better next year. But how bad things are or how quickly the recovery may be, is still rather uncertain. And that is reflected by their multiple forecast scenarios above.