The coronavirus pandemic, which forced shops and factories in Germany to shut, dragged the country’s economy into a recession in the first quarter of 2020, preliminary data showed. According to the data, the German economy contracted 2.2% in the quarter, in what analysts said as a foretelling for a worse economic condition in this current quarter.
However, Germany appears to be performing better than other Europe’s economic powerhouses. The GDP of France and Italy shrank by 5.8% and 4.7%, respectively during the first quarter. German fared better partly because its 16 states allowed factories and construction sites to continue operations. Angela Merkel’s administration also issued unprecedented rescue packages which included aid that allowed companies to employ staff for shorter working hours, to avoid mass layoffs.
The first-quarter contraction followed a slight decline of 0.1% in the fourth quarter of 2019. These two consecutive quarterly GDP shrinks mean that Germany was technically in a recession. However, economists said that Germany would experience deeper contraction in the ongoing quarter as lockdown measures stayed in place until this month, shutting the tourism and service sectors.
