BERLIN, July 30 (Xinhua) — German gross domestic product (GDP) in the second quarter (Q2) of 2020 dropped by 10.1 percent compared to the previous quarter, the German Federal Statistical Office (Destatis) announced on Thursday.
This was “the largest decline since the beginning of quarterly GDP calculations for Germany in 1970,” Destatis noted. The drop was even larger than during the financial crisis when German GDP had fallen by 4.7 percent in first quarter of 2009.
“The coronavirus has sent the German economy into free fall,” said Stefan Kooths, head of forecasting of the Kiel Institute for the World Economy (IfW Kiel) in a press statement on Thursday.
According to Destatis, a “massive slump” was also recorded for exports and imports of goods and services as well as for household consumption expenditure and capital formation in machinery and equipment.
However, Destatis noted that consumption expenditure by the German government had been raised during the COVID-19 crisis.
In June, the German government set up an economic stimulus package worth a total of 130 billion euros (152.6 billion U.S. dollars) for the years 2020 and 2021. The measures to boost consumption included a temporary reduction of value-added tax (VAT), loans for struggling companies and a one-time 300-euro per child bonus.
“The good news is that the low point of the crisis is now behind us,” said Kooths on Thursday but warned that the COVID-19 crisis was “far from over.” Germany would continue to feel the economic consequences for a “long time to come.” Enditem