German Chancellor Angela Merkel takes off her face mask as she gives a press conference on the real situation amid the new coronavirus / COVID-19 pandemic, after meeting with her so-called Corona cabinet on November 2, 2020 in Berlin.
Kay Nietfeld | AFP | Getty Images
The German economy contracted by 5% in 2020, according to full-year GDP (gross domestic product) figures released Thursday.
The preliminary figures, slightly better than the 5.1% forecast, come after a year of economic turbulence for Germany and the rest of the world as the coronavirus pandemic disrupted businesses and large parts of the economy.
Cases of the coronavirus have led to various blockages to public life and economic activity in Germany. Chancellor Angela Merkel announced last week that the last lockdown would be extended until the end of the month.
Amid heightened concerns about the spread of a more virulent variant of the virus initially identified in the UK, German newspaper Bild reported earlier this week that Merkel had told a meeting of lawmakers from her Christian Democratic Union that the current lockdown would can last until the beginning of April.
On Thursday, Germany reported more than 25,000 new cases of the coronavirus in the past 24 hours, bringing the total number of cases to 1,978,590, data from the Robert Koch Institute shows.
Carsten Brzeski, global head of macro at ING, said that “continued lockdowns and declining positive one-offs do not bode well for the first quarter” of 2021.
“Given that one-off positive effects such as inventory building and construction may no longer help in the fourth quarter, and demand from China could also weaken due to lockdowns and the Chinese New Year, the performance of the German economy in the first quarter be weak, ”he said in a note on Thursday.
“While it currently looks like the German economy has avoided a black eye in the last quarter of 2020, it is hard to see how it could do the same magic again in the first quarter.”