Advertising figures with a protective face masks in Munich, Germany.
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Germany’s economic prospects for 2020 are looking increasingly bleak, with the country’s leading research institutes downgrading GDP (gross domestic product) forecasts for this year and beyond.
Publishing a joint economic forecast Wednesday, Germany’s prominent economists warned that the coronavirus pandemic is leaving what they called “substantial marks” on the German economy, adding that “its impact is more persistent than assumed in spring.”
They revised their economic outlook downward by roughly one percentage point for both 2020 and 2021. They now expect GDP to fall by 5.4% in 2020 (lower than a previous -4.2% forecast) and to grow by 4.7% (less than a previously forecast 5.8%) in 2021, and 2.7% in 2022.
The “Joint Economic Forecast” is published twice a year on behalf of the German Economy Ministry and is prepared by the German Institute for Economic Research (DIW Berlin) and the Ifo Institute in Munich, as well as several other organizations.
They said the downgrade follows a more pessimistic assessment of the recovery process. “Although a substantial part of the drop in output experienced in spring has already been recovered, the remaining catch-up process is the more difficult part of the return to normality,” Stefan Kooths, head of forecasting at the Kiel Institute, said on the outlook.
The downgrades are not surprising given a second wave of coronavirus cases that is ravaging Europe and no less Germany, a country that has been praised for its initial response to the virus in spring. Germany kept deaths from the virus low and still under 10,000, far lower than the toll seen in the U.K., France, Spain and Italy, which have all seen over 30,000 fatalities. Nonetheless, Germany, like its neighbors, has been seeing