[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/zbw/ifwkeo/74.html
   My bibliography  Save this paper

German Economy Winter 2020 - Second Covid wave interrupts recovery

Author

Listed:
  • Ademmer, Martin
  • Boysen-Hogrefe, Jens
  • Fiedler, Salomon
  • Groll, Dominik
  • Jannsen, Nils
  • Kooths, Stefan
  • Meuchelböck, Saskia
Abstract
The recovery of the German economy is interrupted. The main reasons are the second Covid wave and the shutdown measures that have been implemented since November. Since these measures will, at least to some extent, probably remain in place for some time to come, GDP will decline in the final quarter of this year and in the first quarter of next year. However, these declines will not reach the extent seen in spring and will be much more concentrated on specific, consumption-focused industries. Several of these industries have not yet fully recovered from the slump in spring, so that less economic activity will be lost there in the winter half-year. In addition, exports are likely to remain on an upward trend in view of the relatively robust global economy. Against this backdrop industry will probably come through the winter half-year without a slump in production. All in all, we now expect a lower GDP growth rate of 3.1 percent next year compared to our autumn forecast (4.8 per cent), after a decline of 5.2 per cent in the current year. If the pandemic can be suppressed sustainably from spring onwards, a strong recovery will take place in the course of the coming year and will lead to a strong increase in GDP of 4.5 percent in 2022 (autumn forecast: 2.4 percent). The labor market will show a similar pattern as GDP so that the recovery here will take place with some delay as well. As the temporary slowdown in the winter half-year will dampen governmental revenues and the shutdown will be accompanied by further aid payments, fiscal budget will be additionally burdened. We expect fiscal budget deficits of 4.9 per cent relative to GDP for the current year and 4.1 per cent for next year. In 2022, the deficit is expected to fall to 1.8 percent.

Suggested Citation

  • Ademmer, Martin & Boysen-Hogrefe, Jens & Fiedler, Salomon & Groll, Dominik & Jannsen, Nils & Kooths, Stefan & Meuchelböck, Saskia, 2020. "German Economy Winter 2020 - Second Covid wave interrupts recovery," Kiel Institute Economic Outlook 74, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkeo:74
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/229943/1/KKB-74-2020-Q4-Germany.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arturas Kaklauskas & Edmundas Kazimieras Zavadskas & Natalija Lepkova & Saulius Raslanas & Kestutis Dauksys & Ingrida Vetloviene & Ieva Ubarte, 2021. "Sustainable Construction Investment, Real Estate Development, and COVID-19: A Review of Literature in the Field," Sustainability, MDPI, vol. 13(13), pages 1-42, July.

    More about this item

    Keywords

    business cycle forecast; stabilization policy; leading indicators; outlook;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:ifwkeo:74. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/iwkiede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.