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