Germany’s statistics office said the country’s GDP boosted significantly by a record 8.5% in the Q3 2020, as the country is still recovering from the economic slump caused by the Coronavirus pandemic first wave in spring. The rebound appears stronger than expected, and mainly driven by increased exports and higher household spending. The boost in economy enabled it to make up for the massive GDP plunge in Q2 2020 from the pandemic.
This reading is higher than the flash estimates of 8.2% growth and made up a big portion in rebounds from the 9.8% GDP plunge in the last quarter.
Regrettably, the outlook is now shadowed by the second wave of infections followed by the partial lockdown as a containment measure. Entertainment venues, restaurants, hotels, and bars have been instructed to close since November 2, but schools and shops remain open. German Chancellor Angela Merkel along with the regional state premiers are planning to extend the state of light-lockdown until December 20, according to a draft preparation meeting that will be held on Wednesday, November 25.
The service sector contraction is predicted to be weighing heavily on the country’s GDP in the last quarter of 2020, while in other countries, lockdown measures are more likely to hit export-oriented manufacturers.
Claus Michelsen, a DIW economist, said the economic output decline was foreseeable with an initial estimate of 1% GDP drop in the final quarter. With these predictions, Germany and many other important trading partners of the nation are expected to be sliding back into recession.
