German economy suffers historic collapse: Biggest GDP drop since Second World War | World | News

The German economy shrank by 5 percent in 2020 due to financial havoc caused by the covid pandemic, preliminary data from the statistics office showed today. This is despite the Chancellor’s coalition Government’s effort to unleash an unprecedented array of rescue and stimulus measures in Europe’s biggest economy to help companies and consumers make it through the crisis. Veronika Grimm from the Expert Council for the Assessment of Overall Economic Development said: “The year 2020 was an exceptional situation.

“Stabilisers such as short-time work prevented bankruptcies and a slump in the labour market with the bridging aid.”

She added a second wave of the deadly coronavirus pandemic, which included a lockdown, made the struggle to financially recover worse.

Exports plunged nearly 10 percent while imports dropped 8.6 percent, the figures showed.

This suggests that Germany’s large trade surplus and the wider current account surplus narrowed due to the pandemic.

However, Ms Grimm was optimistic that exports could improve early this year.

She said: “The Germans consume a lot differently than in the spring.”

Hospitality, culture and travel sectors, which have been closed since November, only contributed around five percent to economic output.

The losses from these sectors are expected to be made up by state aid.

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