German economy could shrink by as much as 20% this year due to coronavirus - Ifo
Reuters
Published Mar 25, 2020 09:14
Updated Mar 25, 2020 10:35
BERLIN (Reuters) - German business morale tumbled in March to its lowest level since 2009, a survey showed on Wednesday, with an Ifo institute economist saying Europe's largest economy could contract by as much as 20% this year due to the impact of the coronavirus.
The Ifo institute said final results from its March survey showed that its business climate index slumped to 86.1 from 96.0 in February.
"This is the steepest fall recorded since German reunification and the lowest value since July 2009," Ifo President Clemens Fuest said in a statement.
"The German economy is in shock," Fuest said, adding that business expectations in particular had darkened as never before while companies' assessment of their current situation also worsened sharply.
In the service sector, the business climate indicator posted its steepest drop since the data was first collected in 2005, Ifo said.
In manufacturing, the index fell to its lowest level since August 2009, with the sub-index for expectations posting the steepest drop in 70 years of industry surveys, Ifo said.
Ifo economist Klaus Wohlrabe told Reuters that the German economy could contract by between 5% and 20% this year depending on the length of the shutdown caused by the pandemic.
Wohlrabe added he expected there to be a severe recession in Europe's largest economy that would last for at least two quarters.
The government expects gross domestic product to shrink by roughly 5% this year due to the outbreak.
The Ifo figures chimed with Markit's survey among purchasing managers released on Tuesday that showed Germany's service sector suffered a record contraction in March, pushing down overall business activity to the lowest level since the global financial crisis in 2009.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.