Current Events > Germany: worst case scenario, economy set to recover *completely* by 2022

(+) Yeah! (+)

The German economy is expected to shrink by more than 6% this year. But a new study found the country could be in for a big economic recovery next year.

The German economy could enjoy a strong recovery next year after experiencing a record-setting economic slump in 2020 due to the coronavirus outbreak, the Institute for Economic Research (Ifo), a Munich-based economic think tank, said on Thursday.

In an updated economic forecast, researchers reiterated that they expect the national economy to shrink by 6.6% in 2020, worse than a slump of 5.7% brought on by the 2009 financial crisis.

However, a recent survey indicates that the situation could make a drastic turnaround in 2021, when Ifo predicts that Germany's economy could grow by 10.2%.

The basis for the new forecast is the Ifo Institute's latest survey of 9,000 German companies.

On average, these businesses expect their own economic situation to normalize within nine months, Chief Economic Researcher Timo Wollmershuser said.

"After a significant slump of 12.4% in the second quarter of 2020, the economy should recover by the middle of next year," he said, adding that only after that point would goods and services be produced on the same level as a situation without the coronavirus.

In a best-case scenario, the economy could recover in about five months, the institute said. This would result in a more mild economic slump of just 3.9% in 2020.

But in a worst-case scenario, the recovery could also take as long as 16 months. The economy could then shrink by 9.3% this year, with growth of 9.5% forecast for 2021.

"In that case, the recovery would stretch into 2022," researchers said.

All three forecasts are based around the assumption that coronavirus restrictions in Germany continue to be gradually lifted and that the country isn't hit with a second wave of infections. [teep's note: these conditions have been fulfilled completely since this article was published]

https://www.dw.com/en/germany-poised-for-big-economic-recovery-ifo/a-53595337

I still maintain that shutting down was necessary and the effects on the economy are able to be mitigated and are worth saving the lives of citizens. I prefer this thinking to that of a certain Nordic country which shall not be named here
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Who are the expected consumers of said goods and services though? Just Germans? Because dont you export a lot to nations like Spain and Italy who are badly hurt both in terms of lives and economically?

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BalanceLost posted...

Who are the expected consumers of said goods and services though? Just Germans? Because dont you export a lot to nations like Spain and Italy who are badly hurt both in terms of lives and economically?

We export to the EU, the US and to China the most. At least in terms of business, all three of these blocs/countries seem to be full steam ahead. It's anecdotal, but I managed to get artisinal paint from Italy imported in during the height of the pandemic, and that's a sector you'd expect to shut down if things were that dire.

In terms of total number of consumers, our GDP is around 4 trillion dollars and we export around 1.2 trillion dollars worth of goods

Also, from the other topic:

https://www.faz.net/aktuell/wirtschaft/corona-lockdown-weniger-stress-mehr-familie-16871774.html

Before Corona, 21 percent of employees regularly felt stressed, whereas during the crisis only 15 percent felt stressed, according to the study. More than one in two of those who now regularly work in the home office said they were more productive there than in the office, and two-thirds said they were now better able to combine work and family life. A similar number also rated the time saved by eliminating the need to commute to work as positive. The overwhelming majority would like to continue working from home at least partially after the crisis.

Seems like the lockdown had positive effects on health too...

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Are you saying it isn't necessary for the whole country to catch covid and sacrifice themselves to the economy?

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TommyG663513 posted...

Are you saying it isn't necessary for the whole country to catch covid and sacrifice themselves to the economy?

Donald Trump and wall street would never lie to us. Clearly it's everyone else who is lying.

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LMAO Germany is fucked.

Annihilated posted...

LMAO Germany is fucked.

Odd takeaway here

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Germany knows how to recover from economic downturns. They'll get on their feet pretty quickly and be leading Europe again by 2025.

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