Virus pushes Germany into recession

An ad for surgical masks is seen on a column in Berlin amid the new coronavirus COVID-19 pandemic. Face masks have become mandatory in shops and on all forms of public transport in Berlin.

AFP/John MacDougall

BERLIN - The coronavirus pandemic has tipped Germany into a recession, official data showed, with Europe's top economy suffering its steepest quarterly contraction in more than a decade as lockdown measures began to bite.

The German economy shrank by 2.2 percent in the first quarter of 2020, federal statistics agency Destatis said, calling the quarter-on-quarter decline "the worst since the global financial crisis" in 2009.

The agency also revised its gross domestic product (GDP) figure for the final quarter of 2019 from zero growth to a contraction of 0.1 percent. That means Germany has now experienced two consecutive quarters of decline, meeting the technical definition of a recession.

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The worst is yet to come however, with economists warning that the full impact from the coronavirus restrictions will be felt more in the second quarter.

Economy Minister Peter Altmaier last month warned that Germany was headed for "the worst recession" in its post-war history as the pandemic brought huge swathes of the economy to a standstill.

Like other European countries, Germany closed factories, shops, schools and restaurants from mid-March and asked workers to stay at home to help curb the outbreak.

The export-reliant powerhouse was also hammered by travel curbs and supply chain shocks worldwide.

Source
AFP