Covid-19: despite its entry into recession, Germany has managed to limit the damage

2021-01-14T21:49:00.021Z

Pandemic forces, the German economy had its worst year since 2009 last year, due to the health and economic crisis. The 5% fall in German GDP precipitated the world's largest economy.

Covid-19: despite its entry into recession, Germany has managed to limit the damage

German Economy Minister Peter Altmaier on May 25, 2020 (illustrative image).

AP - Markus Schreiber

Text by: RFI Follow

3 min

Pandemic forces, the German economy had its worst year since 2009 last year, due to the health and economic crisis.

Germany's 5% drop in GDP threw the eurozone's largest economy into recession, according to the latest data from the Destatis statistical institute, but the country managed to limit the damage.

Publicity

The lights are in the red, but Germany is holding up, thanks in particular to the rebound in its industrial sector.

This allows the government of Chancellor Angela Merkel to hope for a "

clear and tangible

recovery

in the coming months.

The country should even do better than its European partners, such as France with the drop in its gross domestic product by 9.3% or Spain whose GDP has plummeted by 11%.

Manufacturing orders rose 2.3% in November, the highest since the start of the crisis, while production rose 0.9% on one month.

These two indicators have been improving for several months, thanks to the dynamism of the Chinese market, one of the main outlets for Germany.

A horizon not completely clear

The second confinement "

had less impact on the real economy than that of the spring

(...)

we can therefore manage the pandemic without preventing the recovery,

" said the Minister of the Economy.

But the horizon is not entirely clear.

The trade federations fear in particular a wave of bankruptcies, with the disappearance of 50,000 stores due to prolonged health restrictions.

And then, in small and medium-sized businesses, nearly a million jobs are threatened.

Of course, the plans to support the economy have played their part, but they have also

cost the public accounts their first deficit

in eight years.

At nearly 160 billion, it represents 4.8% of GDP.

This is the second highest since the reunification of Germany in 1990 and the massive expenditure it had engendered.

Covid-19: despite its entry into recession, Germany has managed to limit the damage

Covid-19: despite its entry into recession, Germany has managed to limit the damage

A horizon not completely clear

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