The German economy plummeted in the first quarter because of the corona virus pandemic as it has not since the financial crisis. Gross domestic product (GDP) shrank by 2.2 percent in the first quarter compared to the previous quarter, as the Federal Statistical Office announced today.
„This was the largest decline since the global financial and economic crisis of 2008/2009 and the second largest decline since German unification,“ the Federal Statistical Office confirmed a first estimate from mid-May.
Less consumption and falling investments
Consumer spending slumped in the first quarter. Companies invested significantly less in machinery, equipment, vehicles and other equipment. Increased building investment and government spending prevented the crash, according to the information.
Foreign trade also collapsed due to the crisis. Exports fell by 3.1 percent and imports by 1.6 percent. Since the strict containment measures due to the pandemic did not begin until mid-March, the „lock-down“ should slow the economy down much more in the current second quarter than at the beginning of the year. The German government expects the worst recession in the post-war period in 2020: the gross domestic product is expected to collapse by 6.3 percent.