Germany has 2.2% drop in GDP and enters recession

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Result is the worst since 2009, but the country still looks better than its neighbors France and Italy, whose economies fell 5.8% and 4.7%, respectively

Germany’s Gross Domestic Product (GDP) shrank 2.2% in the first quarter of 2020 compared to the fourth quarter of last year, in view of the violent economic impact of the pandemic, according to preliminary data with seasonal adjustments published on Friday, 15, by Destatis, the country’s statistics agency.

The drop is the biggest recorded since the first quarter of 2009, but analysts consulted by The Wall Street Journal had predicted an even more sharp reduction in German GDP, of 2.5%.

In relation to the same period in 2019, the GDP of the largest European economy contracted by 2.3% between January and March. In this case too, the market projection was for a 2.5% decline.

Destatis also revised German GDP for the fourth quarter against the third quarter of 2019, from stable to 0.1% decline. With losses accumulated in two consecutive quarters, Germany’s economy entered a technical recession.

Coronavirus in Germany
Berlin restaurant worker prepares for reopening, while isolation measures are loosened Photo: Fabrizio Bensch / Reuters – 5/14/2020

Economists project a greater fall in the second quarter, as the isolation lasted for April and early May, and sectors such as tourism and gastronomy remain closed.

Even so Germany seems to be better off than its neighbors France and Italy, whose economies contracted 5.8% and 4.7% respectively in the first quarter.

“Things are going to get worse before it gets better,” said Carsten Brzeski of ING. “To be more precise, the data will be worse, although the worst may be behind us.”

Source: https://economia.estadao.com.br/noticias/geral,afetada-pelo-coronavirus-alemanha-entra-em-recessao-apos-queda-de-2-2-no-pib-do-1- quarter, 70003303842

Result is the worst since 2009, but the country still looks better than its neighbors France and Italy, whose economies fell 5.8% and 4.7%, respectively

Germany’s Gross Domestic Product (GDP) shrank 2.2% in the first quarter of 2020 compared to the fourth quarter of last year, in view of the violent economic impact of the pandemic, according to preliminary data with seasonal adjustments published on Friday, 15, by Destatis, the country’s statistics agency.

The drop is the biggest recorded since the first quarter of 2009, but analysts consulted by The Wall Street Journal had predicted an even more sharp reduction in German GDP, of 2.5%.

In relation to the same period in 2019, the GDP of the largest European economy contracted by 2.3% between January and March. In this case too, the market projection was for a 2.5% decline.

Destatis also revised German GDP for the fourth quarter against the third quarter of 2019, from stable to 0.1% decline. With losses accumulated in two consecutive quarters, Germany’s economy entered a technical recession.

Coronavirus in Germany
Berlin restaurant worker prepares for reopening, while isolation measures are loosened Photo: Fabrizio Bensch / Reuters – 5/14/2020

Economists project a greater fall in the second quarter, as the isolation lasted for April and early May, and sectors such as tourism and gastronomy remain closed.

Even so Germany seems to be better off than its neighbors France and Italy, whose economies contracted 5.8% and 4.7% respectively in the first quarter.

“Things are going to get worse before it gets better,” said Carsten Brzeski of ING. “To be more precise, the data will be worse, although the worst may be behind us.”

Source: https://economia.estadao.com.br/noticias/geral,afetada-pelo-coronavirus-alemanha-entra-em-recessao-apos-queda-de-2-2-no-pib-do-1- quarter, 70003303842

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