Michael Probst / AP
The economic volume of production in Germany – European power plants – decreased during the second quarter of this year by 10.1% compared to the same period last year. This double-digit decline is most rapid as the country’s Federal Statistical Office began tracking quarterly economic data half a century ago.
“This is an impressive figure – minus 10.1%,” wrote Henrik Böhme, an economic analyst at the German state broadcaster DW. “Never before in Germany’s post-war history has the country’s economy fallen as sharply as in the second quarter of 2020.”
The historic downturn, which exceeds the 9% forecast for economists surveyed by Reuters, occurred during a pandemic in which more than 200,000 Germans – just over 0.2% of the country’s 84 million people – were confirmed to be infected with the coronavirus, according to the website for tracking the pandemic of Johns Hopkins University.
“The [10.1%] the figure is not surprising, Böhm adds, “especially at a time when factories stopped producing, container ships stopped loading, services could not be provided, fairs were no longer held, and restaurants had to close.”
The decline in German production in the last quarter, if calculated annually, will be 34.7%. This is a steeper decline than the annual decline of 32.9% in the US economy during the second quarter of 2020, the sharpest decline ever recorded in US production. With more than 4.4 million known cases, the level of coronavirus infection in the United States is about 1.3% higher than in Germany.
Despite the economic downturn, Germany has not suffered major job losses. According to the Federal Statistical Office, the unemployment rate in June was 4.5%, while the number of employed decreased by 1.4% compared to the first quarter of this year.
German firms surveyed this month by the Ifo Institute in Munich have shown growing optimism about economic recovery. This was reflected in the growth of the Ifo business climate index from 86.3 points in June to 90.5 points in July.
However, Germany’s prospects remain closely linked to the effects of the pandemic elsewhere.
“The highly export-oriented German economy is likely to be negatively affected,” said Böhme, “because important markets such as the United States, as well as countries such as Brazil and India, are not really in control of the pandemic.”