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The German economy grew in the summer despite the crown crisis. According to the Federal Statistical Office, GDP increased 8.2 percent between July and September compared to the previous quarter. By 2020, however, Economic Affairs Minister Altmaier expects a 5.5 percent drop.
The German economy is back in spring after the crown-related collapse. Gross domestic product (GDP) increased sharply by 8.2 percent in the July-September period compared to the previous quarter, as announced by the Federal Statistical Office in Wiesbaden on the basis of preliminary data.
That doesn’t mean that Europe’s largest economy is at the top. Compared to the fourth quarter of 2019, the quarter before the global crown crisis, GDP was 4.2 percent lower.
Higher private consumer spending
Growth in the third quarter compared to the previous quarter was reportedly driven by higher spending from private consumers and a strong increase in exports. In addition, companies invested more in machinery and equipment.
In the second quarter of the year, GDP dramatically collapsed after much of public life was shut down as a result of the crown. At the beginning of the year, the economic output of Europe’s largest economy had already fallen compared to the previous quarter.
Partial crash could slow recovery
According to economists, the rise in new corona infections and the recently decided partial closure in November could slow the rally towards the end of the year. The president of the Institute for World Economics, Gabriel Felbermayr, expects significant economic losses for the German economy. The damage is likely to be less than during the March and April shutdown. However, growth in the fourth quarter compared to the previous quarter will likely stop.
Government: GDP drop for 2020 by 5.5 percent
The federal government expects gross domestic product (GDP) to decline by 5.5 percent for 2020 as a whole due to the historic downfall of the Corona crisis. As the Federal Minister of the Economy Peter Altmaier announced to the federal government in the autumn forecast, GDP growth of 4.4 percent is expected by 2021; by 2022 an increase of 2.5 percent. Therefore, the pre-crisis level will be reached again in early 2021/2022 at the earliest.
