The government of German planned 130 billion euros of stimulus programme to boost the economy. The amount is equivalent to $147.33 billion and predicted to boost economic output by 1.3% for 2020 and 2021 if the pandemic curbed sustainably. As the country’s economy is forecasted to contract by 9.4% year-on-year from the Coronavirus pandemic, the next year the economy is projected will increase to 3% without the added stimulus. If the latest economic stimulus is implemented as announced, the contraction will be around 8% and rise higher to 4.3% by 2021.
A government spokesman said a special cabinet meeting scheduled on Friday, June 12 and Chancellor Merkel coalition is wishing to pass the majority of the stimulus package. On June 29, the German Parliament is also intended to hold special sessions to pass the package.
The stimulus programme includes lowering VAT to boost consumption, doubling the incentives to promote the sale of electric cars and a 300 euro allowance per child to help families. This package is following a previous 750 billion euro agreed in March.
The country’s GDP is predicted to dive deeper in the Q2 than the Q1, which was down by 2.2% year-on-year, recorded as the sharpest downturn since 2009. For the outlook, starting from Q3 the economy is forecasted to recover very slowly if the outbreak is curbed and lockdown measure eased.
