Germany: GDP to fall by 14% in Q2, 2020 down by 9% – Deutsche Bank

Economists at Deutsche Bank update the forecast for the German economy after seeing that the asynchronous global development of the COVID-19 pandemic and lasting impediments to global trade will make the recovery less dynamic than hoped for earlier.

Key quotes

“We see Q2 GDP falling by 14% qoq, with the risks still skewed to the downside.”

“We expect German GDP to decline by 9% this year and to expand by about 4% in 2021.”

“We expect industrial production in Germany to fall by roughly 10% to 15% in real terms in 2020. It could increase by more than 10% in 2021. However, even with a rise this sharp, production would still fall short of the levels seen in 2018.”

“Despite the comprehensive measures to secure employment, unemployment is likely to rise in 2020. Our baseline scenario implies an increase in the 2020 unemployment rate to almost 7% (monthly peak: 8.5%) and only falling to 6% in 2021.”