German economy to contract by 6.6% in 2020
April 28, 2020
Germany's economy is not expected to recover from the effects of the coronavirus crisis until the end of 2021, the Institute for Economic Research (Ifo), a Munich-based economic think tank, said on Tuesday.
Ifo has predicted that the German economy, Europe's largest, will contract by 6.6% overall in 2020. The think tank said it had already diminished by 1.9% in the first quarter of 2020 and is expecting a 12.2% contraction in the three months that follow.
Read more: Opinion: EU must address pandemic's effects on economies
Several of Germany's economic sectors have been seriously impacted by the effects of COVID-19 mitigating measures. Travel agencies and tour operators reported the biggest slump, followed by the aviation and the hotel and restaurant industries.
Read more: Coronavirus: European solidarity comes at a price
But the arts and entertainment sector and vehicle manufacturing have also been affected. The only industry that has seen a boost has been the pharmaceutical sector. This has been reflected by a recent jump in shares of Bayer, which contributed to a general upbeat opening European markets on Monday.
Ifo predicted that all sectors of the economy could see a boost, as lockdowns are gradually eased, from the third quarter and beyond.
jcg/rt (Reuters, dpa)