COVID hit German economy harder than expected in Q1

Germany's gross domestic product (GDP) shrank slightly more than expected in the period from January to March this year, contracting by 1.8% compared to data from the last quarter of 2020, the Federal Statistics Office (Destatis) said on Tuesday.

In April, Destatis had estimated a 1.7% slump.

The fall can largely be attributed to the effects of the coronavirus pandemic and the measures taken to stem its spread.

Where were the losses and gains? 

The hardest-hit economic sector was private consumption, with households spending 5.4% less on goods and services. Destatis said this was a clear result of coronavirus restrictions.

On the positive side, investment in construction rose by 1.1%. International trade also picked up again at the beginning of the year, with imports of goods and services rising 3.8%, while exports managed a growth of only 1.8%. 

Compared with the same period in 2020, however, Germany's GDP shrank by a whole 3.4%. And in comparison with the fourth quarter in 2019, before the coronavirus crisis began, the economy fell by 5%.

Due to restrictions aimed at stemming the spread of COVID-19, businesses across Germany remained largely closed under strict lockdowns in the first few months of the year.

As new case numers have started to drop, certain regions of Germany have begun to reopen in recent weeks.

tj/rs (dpa, AFP)