test


Member ID:
Password: 
Stay logged in for 30 days
Forget Your Password?
close

login CCFGroup App

Economy | Time: Sep 23 2020 1:39PM
German economy to shrink less than previously expected: ifo Institute
 
Text size
Germany's economic downturn was less severe than expected as the country's gross domestic product (GDP) was anticipated to only shrink by 5.2 percent this year, not 6.7 percent as previously expected, the ifo Institute announced on Tuesday.

"The second-quarter decline was smaller than we had feared and the current recovery is proceeding better than we had expected," said Timo Wollmershaeuser, head of forecasts at ifo.

"However, the pace of recovery is likely to slow down noticeably in the further course of the year," because certain services related to consumer spending remained limited due to COVID-19 restrictions as well as "permanent changes in the behavior of consumers and companies," ifo noted.

At the assumed rate of recovery, Germany's GDP would "not reach its pre-crisis level until the fourth quarter of 2021." For the next year, ifo is expecting a GDP growth of 5.1 percent.

The autumn forecast by the German Economic Institute (IW) published last week was more pessimistic and assumed GDP to decline by almost 6.25 percent in 2020 and to grow by only around 4.5 percent in 2021.

However, IW noted that many major economies had seen a "pronounced economic recovery", especially in China, during the summer months.

The German government surplus of 52.5 billion euros (61.7 billion U.S. dollars) in 2019 would plunge to minus 170.6 billion euros this year "in response to falling revenue and a drastic rise in expenditure to support the economy," ifo noted.

In order to stimulate private consumption and mitigate the economic effects of the COVID-19 pandemic, the German government passed an economic stimulus package worth 130 billion euros in June, including a temporary reduction of value-added tax (VAT) from 19 to 16 percent.

Germany's "much criticized current account surplus" from exports, imports, services and transfers would fall from 244 billion euros in 2019 to 215.4 billion euros this year. According to ifo, exports would decline much faster than imports in 2020.

In its recent report about the economic situation in September, the Ministry for Economic Affairs and Energy noted that the outlook for German foreign trade provided reason for "cautious optimism."

In the wake of the recovery in production and demand following the easing of COVID-19 restrictions in Germany as well as in other countries, exports and imports were also beginning to catch up. "This process should continue in the further course of the year," the ministry noted. (1 euro = 1.18 U.S. dollars)

Source: Xinhuanet.com
Related Articles
Foreign trade rises in China's Shenzhen
China still 'top draw' for capital flows in 4th quarter
Economic Watch: China's industrial profits restore as economy perks
FDI surges by 5.2% in first nine months
11.11 gala to boost spending
China's fixed-asset investment up 0.8 pct in first 3 quarters
China's retail sales up 3.3 pct in September
China's industrial output up 5.8 pct in Q3
China's GDP grows 0.7 pct in first three quarters
Latest on the novel coronavirus outbreak (Oct 16, 2020)
 
Research
Development change of virgin PSF and recycled PSF and their ...
Polyester market review in H1 2020 and market outlook
PET bottle chip market to face challenges after an ...
Spandex market review in H1 2020 and market outlook
PTA and PX market outlook in H2 2020
Analysis on production changes of global major cotton ...
 
 

浙公网安备33010902000742号