Except for the construction industry, almost all major industries experienced a decline last year.
Since the financial crisis, household spending has fallen, and business investment has fallen the most. Since 2009, the import and export of goods and services fell for the first time, down 9.9% and 8.6% respectively.
However, the decline in GDP was shallower than expected, proving the value of the backbone of Germany’s industry, which made it comparable to the United States and Britain France, Italy and Spain.
Jörg Krämer, chief economist of the Commercial Bank, wrote in a report to clients on Thursday: “It is clear that the strength of export-oriented manufacturing has offset the effects of the blockade.”
The German government has closed restaurants, bars and clubs for the second time since early November to curb the increase in coronavirus cases. Non-essential shops, services and schools will be closed in mid-December and remain closed.
Capital Economics Chief Economist Andrew Kenningham added: “Germany’s outstanding performance reflects its relatively light lock-in in the first wave of Covid-1
However, the short-term prospects for the German economy are not optimistic.
Blockade restrictions still exist, and German Chancellor Angela Merkel warned this week that they may not relax in a few weeks.
“At present, it seems that the German economy has avoided dark circles in the last quarter of 2020, but it is difficult to see how it can show the same magic again in the first quarter,” Carsten Brzeski ING, global head of German macroeconomic research, wrote On the note.
Cunningham added: “Economic activity may fall again in the first quarter.” “Although manufacturers should continue to benefit from strong external demand, the scope for catch-up growth will shrink as production approaches pre-pandemic levels. “
Kramer of Commercial Bank said that the blockade policy has also increased domestic savings, which may further stimulate the economy if households spend some extra money.
Cunningham added that this will allow Germany’s GDP to return to pre-pandemic levels in the last quarter of 2021 (that is, six to nine months before the emergence of the wider European economy).