The German economy, the largest in Europe, suffered a record collapse of 9.7% in the second quarter of 2020 as a result of the impact of the Covid-19 pandemic and the containment measures implemented, although the contraction was four tenths less than the 10.1% drop originally estimated by the Federal Statistical Office (Destatis).

"The contraction of the German economy was therefore much greater than during the financial and economic crisis of 2008 and 2009, when GDP fell 4.7% in the first quarter of 2009, and the steepest decline since they began. quarterly GDP calculations for Germany in 1970, "the statistical office said.

Thus, Germany entered a technical recession in the second quarter of the year , after having recorded a 2% drop in activity, two tenths less than initially estimated, between the months of January and March.

Compared with the second quarter of 2019, German GDP fell by 11.3%, exceeding the year-on-year contraction of 7.9% in the second quarter of 2009, according to Europa Press.

Internal consumption

In its analysis, Destatis noted that, as a result of the coronavirus pandemic and the restrictions implemented, household final consumption spending fell dramatically by 10.9% in the second quarter of 2020 compared to the first quarter, while that gross fixed capital formation in machinery and equipment fell by 19.6% and gross fixed capital formation in construction fell by -4.2%.

In this sense, the office highlighted that "only the final consumption expenditure of public administrations had a stabilizing effect by exceeding the figure for the previous quarter by 1.5%, which prevented an even greater decline in GDP."

Likewise, trade with other countries also plummeted between April and June. In the second quarter of 2020, exports of goods and services fell 20.3% compared to the first quarter of 2020, after price, seasonal and calendar adjustments. Imports registered a fall of 16%.

In the first quarter of 2020, at the beginning of the coronavirus crisis, German exports had already fallen by 3.3% and imports by 1.9%.

The data for the second quarter represent substantially larger falls in exports and imports than during the financial crisis in the first quarter of 2009, when foreign sales fell 11%, while purchases fell 5.9%.

job

On the other hand, Destatis reported that in the second quarter the number of employed persons in Germany reached 44.7 million people , which represented a decrease of 574,000 (-1.3%) compared to the previous year, although it highlighted that the Short-time work mechanisms made it possible to curb the increase in unemployment.

In this sense, between April and June the number of hours worked per employed person "fell extraordinarily" by 8.8% compared to the previous year, according to initial provisional calculations by the Institute of Labor Investigations of the Federal Employment Agency.

Gross wages and salaries of employees decreased 4.8% compared to the second quarter of 2019, with a year-on-year decline in net terms of 4.3%. However, due to government aid, household disposable income was only 0.8% lower in the second quarter of 2020 than a year earlier.

On the other hand, global labor productivity (GDP adjusted in price per hour worked by employed persons) fell by 1.5% compared to the same quarter of the previous year, according to provisional calculations, while labor productivity per employed person fell to a 10.2% compared to the second quarter of 2019.

According to the criteria of The Trust Project

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  • Germany
  • economy
  • Coronavirus
  • Covid 19

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