German Officials Suggest That 2021 Will be Another Tough Year - Forex News by FX Leaders
German GDP 2020

German Officials Suggest That 2021 Will be Another Tough Year

Posted Thursday, January 14, 2021 by
Skerdian Meta • 2 min read

The German economy contracted 5.0% in 2020. The headline is a little better than estimates of a 5.1% and 5.2% decline in economic output for the whole of last year. However, it is still relatively poor, all things considered, but arguably not as bad as feared back in March and April last year. The annual estimate is non-seasonally adjusted.

Of note, private consumption declined 6.0% y/y following a 1.6% y/y boost in 2019. Meanwhile, exports slumped 9.9% y/y and imports 8.6% y/y, following an increase of 1.0% y/y and 2.6% y/y in 2019 respectively.

 

Comments by German RKI president, Lothar Wieler

  • We will have the pandemic under control by the end of this year
  • It is possible that the situation will still get worse, thanks to the new virus variant
  • German ICU capacity more challenged than ever
  • 10 out of 16 German state hospitals are facing bottlenecks, due to virus surge

Well, that’s the hope. We’ll see from the vaccine rollout though, and how effective it is in achieving a herd immunity later on in the year before reassessing the situation.

Comments by German Minister of Economy, Peter Altmaier

  • German economic growth this year likely to be weaker than expected
  • Government will continue with its strong response to the pandemic
  • But measures can only be temporary
  • We will do everything in our means to guarantee that this will be a recovery year
  • But the economy is likely to grow less this year than previously expected
Given how the virus restrictions are still likely to stay in place throughout Q1 and potentially until April, that does chip away at much of the optimism that was expressed towards the end of last year.
This also adds to the headwinds against the Euro and European assets, as the virus situation across the region still warrants more lockdown measures for the time being. The recent political upheaval in Italy only adds to the list of drama so far, that has kickstarted the new year.
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About the author

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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