ADVERTISEMENT

Coronavirus causes record plunge in Germany's GDP during second quarter of 2020

caption
caption Copyright Francisco Seco/AP
Copyright Francisco Seco/AP
By Mathieu Pollet
Share this articleComments
Share this articleClose Button

This is the largest fall since the beginning of quarterly GDP calculations by the country in 1970

ADVERTISEMENT

Germany's economic output made a historic decline in the second quarter of 2020.

It dropped by 10.1% compared to the previous quarter and by 11.7% compared to the same quarter from 2019, the Federal Statistical Office Destatis said on Wednesday.

This is the largest fall since the beginning of quarterly GDP calculations by Germany in 1970, with GDP falling by 4.7% during the first quarter of the 2009 financial crisis.

In a press release, the organisation said that a "massive slump was recorded for exports and imports of goods and services as well as for household final consumption expenditure and capital formation in machinery and equipment".

Despite the economic slump, the German unemployment rate stayed below the EU average, rising from 3.8% at the end of March to 4.2% in June — the EU unemployment rate went from 6.5% to 7.1% during the same period.

This equates to around 1,865,000 jobless people in Germany.

Kurzarbeit, or Germany's short-time work scheme, was instrumental in the attempt to keep people in work. The system sees employees’ working hours reduced instead of them being dismissed.

The government also provided 60% (more for workers with children) of salaries for people on Kurzarbeit.

Germany has seen one of Europe's biggest coronavirus stimulus packages at €130 billion.

But unemployment remains a major concern. A Euronews-commissioned poll recently found that 64% of Germans believe that the "worst is yet to come" with respect to the economic damage caused by the COVID-19 pandemic.

The airline Lufthansa earlier this month launched the second round of measures in a restructuring programme, which saw both jobs and fleets cut.

Share this articleComments

You might also like

Angela Merkel's deputy Olaf Scholz to run for chancellor in 2021 vote

Football fans to return to stadiums from mid-September in Germany

German economy stagnates as eurozone growth reaches 7-year low