Business & Economy

German economy shrinks 5% amid pandemic measures

Berlin, Jan 14 (efe-epa).- Germany’s GDP dropped 5% in 2020 as a result of the restrictions placed on socio-economic activity to contain the spread of Covid-19.

The latest figures from the federal statistical office Destatis point to the biggest economic downturn since the 2008/9 global financial crisis.

The president of the department, Georg Thiel, said the German economy, Europe’s largest, was “seriously affected” by the consequences of the pandemic.

The fall in GDP during 2020 was slightly less than had been forecast by Germany’s central bank, the Bundesbank, which predicted a 5.5% drop in a December report.

According to Bundesbank estimates, the German economy was set to grow 3% in 2021 and 4.5% in 2022.

Destatis said the pandemic had affected “practically all sectors” of the economy, including services and manufacturing.

The German economy grew just 0.6% in 2019, the biggest tail-off since the economic crisis when, in 2009, GDP contracted by 5.7%.

The service industry was hit particularly hard in 2020, logging a decrease of 6.3% according to Destatis, with emergency measures to control the virus taking a bite out of commerce, transport and hospitality.

Coronavirus travel restrictions prompted a “historic fall” in tourism, the statistics office added, while online shopping experienced a boom.

The year 2020 also spelled an end to 14 consecutive years of job creation and culminated with 1.1% fewer workers on the register — some 477,000 employees in real terms compared to the previous year.

Having weathered the first wave of the coronavirus relatively well compared to European counterparts like Spain and Italy, Germany has been hit hard by a second wave, which has prompted officials to revive tough lockdown measures.

The country is currently rolling out its Covid-19 vaccine program and has issued the jab to more than 750,000 people, although health minister Jens Spahn warned it would take time before the effects of the campaign are felt.

German health authorities on Wednesday logged 19,600 new cases and 1,060 deaths in 24 hours. EFE-EPA


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