German economy collapses by five percent in the corona crisis

Economic performance in Germany collapsed massively in the corona crisis year 2020. The gross domestic product (GDP) shrank by 5.0 percent compared to the previous year, as the Federal Statistical Office announced on Thursday in an initial estimate.

The German economy has thus fallen into a deep recession after a ten-year growth phase in the corona crisis year 2020. Nevertheless, the slump is not quite as severe as in the global financial and economic crisis in 2009: At that time, GDP had declined by 5.7 percent. Analysts had expected an average decrease of 5.2 percent.

The corona crisis left its mark in almost all areas of the economy: both industry and service sectors were hit hard, only the construction industry grew.

Consumer spending also fell – by 6 percent

In contrast to the situation during the financial and economic crisis, when overall consumption supported the economy, private consumer spending declined by 6.0 percent year-on-year – more than ever before. In contrast, government consumer spending had a stabilizing effect, with a price-adjusted increase of 3.4 percent. According to statistics, the procurement of protective equipment and hospital services contributed to this.

Exports and imports of goods and services fell in 2020 for the first time since 2009, the authority said. Adjusted for price, exports shrank by 9.9 percent and imports by 8.6 percent.

This ended the 14-year increase in employment due to the corona pandemic, which even survived the financial and economic crisis of 2008/2009, as statisticians pointed out. Marginally employed people and the self-employed were particularly affected.

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