German Chancellor Angela Merkel takes off her face mask while giving a press conference on the real situation in the midst of the new coronavirus / COVID-19 pandemic, after a meeting with her so-called Corona-Cabinet on 2 November 2020 in Berlin.
Kay Nietfeld | AFP | Getty Images
Germany’s economy contracted 5% in 2020, according to GDP (gross domestic product) data for the year, released on Thursday.
The preliminary figures, which were slightly better than the 5.1% forecast, come after a year of economic turmoil for Germany and the rest of the world, when the coronavirus pandemic caused disruptions in companies and large sectors of the economy.
Coronavirus cases have caused several blockages in public life and economic activity in Germany. Chancellor Angela Merkel announced last week that the last blockade would be extended to the end of the month.
Amid increased concern over the spread of a more virulent variant of the virus, initially identified in the UK, the German newspaper Bild reported earlier this week that Merkel had said at a meeting of lawmakers from her party, the Christian Democratic Union, that the current blockade could last until the beginning of April.
On Thursday, Germany reported more than 25,000 new cases of coronavirus in the last 24 hours, bringing the total number of cases to 1,978,590, data from the Robert Koch Institute showed.
Carsten Brzeski, global head of macro at ING, said that “ongoing roadblocks and positive decline factors are not a good omen for the first quarter” of 2021.
“Given that one-off positive points, such as increased inventory and construction, may no longer help in the fourth quarter, and demand from China may also weaken because of the blockages and the Chinese New Year, the first quarter’s performance of the German economy is expected to be weak “he said in a note on Thursday.
“While it currently appears that the German economy avoided a black eye in the last quarter of 2020, it is difficult to see how it can perform the same magic again in the first quarter.”