Germany Dumps Into Recession As GDP Drops 2.2%
Germany’s Federal Statistical Office (Destatis) announced that first-quarter GDP dropped 2.2% as its economy plunged into recession. Notably, COVID-19 could only have affected the latter part of the quarter because its rapid spread in Germany started well into the period.
The Office wrote:
The corona pandemic hits the German economy hard. Although the spread of the coronavirus did not have a major effect on the economic performance in January and February, the impact of the pandemic is serious for the 1st quarter of 2020. The gross domestic product (GDP) was down by 2.2% on the 4th quarter of 2019 upon price, seasonal and calendar adjustment. That was the largest decrease since the global financial and economic crisis of 2008/2009 and the second largest decrease since German unification. A larger quarter-on-quarter decline was recorded only for the 1st quarter of 2009 (-4.7%).
Germany is the heart of the European economy. Its GDP is by far the largest at $4 billion. Its huge manufacturing sector exports goods all over the world. A drop in its import/export sector spreads as widely as China and the U.S.
The Office added:
Economic performance slumped heavily also in a year-on-year comparison. The GDP in the 1st quarter of 2020 was down a price-adjusted 1.9%, and a calendar-adjusted 2.3%, on a year earlier. Only in the years of the financial and economic crisis of 2008/2009 had there been larger decreases on the relevant quarter of the preceding year. The largest decrease (-7.9%) had been recorded for the 2nd quarter of 2009 (in calendar-adjusted terms for the 1st quarter of 2009 (-6.9%)).