mcloudy.png
Sunday January 17th, 2021 2:31PM

German economy shrank 5% in pandemic year 2020

By The Associated Press

FRANKFURT, Germany (AP) — The German economy, Europe's largest, shrank by 5% in the pandemic year 2020, ending a decade of growth as lockdowns wiped out much business and consumer activity.

As dreary as the numbers were, the drop was smaller than many had expected, and a high savings rate suggested consumers could be ready to unleash a strong economic recovery when the lid finally comes off.

The state statistics office Destatis said Thursday that only the construction sector showed an upturn as industry and services saw deep declines. Agriculture, financial services, real estate and information and communication suffered smaller drops in output.

Looking ahead, the stage could be set for a substantial economic rebound since consumers might be ready to spend once the pandemic recedes, having increased their saving rate to a record high of 16.3% during 2020. Albert Braakmann, head of the group for economic estimates and prices, said consumption “could increase significantly.”

Economy Minister Peter Altmaier said that once the pandemic was contained, growth would be “clear and noticeable” in 2021. The government's estimate of 4.4% for 2021 growth is to be updated Jan. 27.

Germany's economy did better than several others in the 19-country eurozone as it was supported by manufacturing, which has taken less of a hit than services. The downturn was smaller than in France, which according to European Commission estimates cited by Destatis, shrank 9.4%, Italy, which was down 9.9%, and tourist-dependent Spain, off 12.4%. Official figures for those countries are due in early February.

The U.S. had a downturn of 4.6% while China's economy grew 2.1%, according to the estimates used by Destatis.

In the fourth quarter, German growth “roughly stagnated,” said Michael Kuhn, head of the GDP and output calculation group at the agency. He said that since very little data was available for December, when the latest round of lockdowns hit, the agency was not making an official estimate. The fourth-quarter figure is to be announced on Jan. 29.

The pandemic downturn, which followed 10 straight years of annual growth, was smaller than that experienced during 2009, when the economy shrank by 5.7% The 2020 figure compares to modest growth of 0.6% in 2019.

In 2020, the economy seesawed between lockdowns and a robust upswing that still left growth below the previous year. The worst quarter, the second, saw a quarter-on-quarter plunge of 9.8% followed by a rebound of 8.2% in the third. Unemployment has been contained in Germany and many other European countries only by extensive state support such as paying the salaries of furloughed workers.

  • Associated Categories: Associated Press (AP), AP World News, AP Business, AP Business - Economy
© Copyright 2021 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
German economy shrank 5% in pandemic year 2020
The German economy shrank by 5% in the pandemic year 2020
4:21AM ( 4 minutes ago )
Indonesian health workers receive COVID-19 vaccination
Indonesia has started vaccinating health workers and public servants for COVID-19, a day after President Joko Widodo received the first shot of China’s Sinovac Biotech vaccine
3:57AM ( 28 minutes ago )
The Latest: Turkey starts vaccinations with China's Sinovac
Turkey has become the latest country to roll out its COVID-19 vaccination program, starting with health care workers in hospitals across the country
3:54AM ( 31 minutes ago )
Associated Press (AP)
S. Korean court upholds prison term for ex-president Park
 South Korea’s Supreme Court has upheld a 20-year prison term for former President Park Geun-hye over bribery and other crimes
2:32AM ( 1 hour ago )
Leaders like UK’s Johnson who wooed Trump face tricky reset
British Prime Minister Boris Johnson has said a lot of nice things about U.S. President Donald Trump over the years
2:32AM ( 1 hour ago )
Merkel's party chooses new leader ahead of German election
German Chancellor Angela Merkel’s center-right party is choosing a new leader this weekend
2:21AM ( 2 hours ago )
AP Business
US to block cotton from China region targeted in crackdown
The U.S. government says it will halt imports of cotton and tomatoes from the Uighur region of China in its most sweeping action yet to pressure the Communist Party to stop a campaign against ethnic minorities
9:02PM ( 7 hours ago )
Wall Street drifts higher; Treasury yields slow their rise
Stocks closed mixed on Wall Street after major indexes spent the day drifting up and down, not far off the record highs they reached last week
4:58PM ( 11 hours ago )
Fed survey finds economy slowing in some areas of country
A Federal Reserve survey of U.S. business conditions has found modest economic gains at the start of the year, although some parts of the country were weighed by a renewed surge of COVID-19 cases
4:29PM ( 11 hours ago )
AP Business - Economy
Indonesian health workers receive COVID-19 vaccination
Indonesia has started vaccinating health workers and public servants for COVID-19, a day after President Joko Widodo received the first shot of China’s Sinovac Biotech vaccine
3:57AM ( 28 minutes ago )
The Latest: Turkey starts vaccinations with China's Sinovac
Turkey has become the latest country to roll out its COVID-19 vaccination program, starting with health care workers in hospitals across the country
3:54AM ( 31 minutes ago )
What should I know about COVID-19 vaccines if I'm pregnant?
Vaccination is likely the best way to prevent COVID-19 in pregnancy, when risks for severe illness and death from the virus are higher than usual
3:52AM ( 33 minutes ago )
The Latest: Germany records highest single-day death toll
Germany’s disease control agency has reported the highest single-day death toll from COVID-19
3:49AM ( 37 minutes ago )
'At 6 p.m., life stops': Europe uses curfews to fight virus
Trying to fend off the need for a third nationwide lockdown that would further dent Europe’s second-largest economy and endanger more jobs, France is instead opting for creeping curfews
3:42AM ( 44 minutes ago )