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Q1 GDP Contracts by 2.2% in Germany, But Officials Expect a Bigger Contraction in Q2

German Q1 GDP posted a 2.2% contraction, while Q2 is expected to be much worse

Skerdian Meta•Friday, May 15, 2020•1 min read
There's no pride in pandemics, as Germany falls

The global economy has fallen in the deepest abyss with this coronavirus lockdown which is driving everyone mad. Eurozone countries closed even before North America, as the virus spread in Europe first. Manufacturing and particularly services are seeing the deepest contraction ever, so it wasn’t a surprise that the German economy contracted in Q1, although this is nothing compared to what’s to come for Q2, because the shutdown only started in March. Below is the German GDP report for Q1:

Latest data released by Destatis – 15 May 2020

  • Q1 preliminary GDP -2.2% vs -2.2% expected
  • Q4 GDP stood at 0.0%, unrevized
  • GDP (non-seasonally adjusted) YoY -1.9% vs -1.6% expected
  • Prior GDP (non-seasonally adjusted) YoY at +0.3%
  • GDP (working day adjusted) YoY -2.3% vs -2.0% y/y expected
  • Prior GDP (working day adjusted) YoY +0.4%

The drop matches the estimate and it just reaffirms the start of the recession in Germany. Q2 economic conditions look set to be much worse amid the full scale lockdown seen in April, with only a gradual recovery expected this month and in June.

Comments by the German economy ministry

  • Economic contraction will accelerate in Q2
  • Recession should have reached its low point in April
  • Indicators in April don’t show signals of hope
  • But a turnaround appears palpable at the beginning of May

Some token remarks by the economy ministry in conjunction with the Q1 GDP report release. This just reaffirms what we already know, that Q2 economic conditions look set to be much worse amid lockdown measures and the virus outbreak impact in the region.

ABOUT THE AUTHOR See More
Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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