Second lockdown taking its toll on German economy
16 Feb 2021, 03:59 GMT+10
- Ongoing COVID-19 measures continue to weigh on the German economy in the first quarter of 2021.
- The recovery after the end of the first COVID-19 lockdown in spring last year had “largely come to a halt for the time being in the wake of the second lockdown.”
- After a strong increase of 8.5% in the third quarter, Germany’s gross domestic product (GDP) grew by only 0.10% in the fourth quarter of last year.
BERLIN, Germany, Feb. 15 (Xinhua) — Ongoing COVID-19 measures continue to weigh on the German economy in the first quarter of 2021, according to the monthly economic report published by the Ministry for Economic Affairs and Energy (BMWi) on Monday.
The recovery after the end of the first COVID-19 lockdown in spring last year had “largely come to a halt for the time being in the wake of the second lockdown,” BMWi noted.
After a strong increase of 8.5 percent in the third quarter, Germany’s gross domestic product (GDP) only grew by 0.1 percent in the fourth quarter of last year, according to the Federal Statistical Office (Destatis).
Germany entered a lockdown in November when the second COVID-19 wave hit the country. Health regulations have since been tightened and the lockdown was extended until at least March 7. Non-essential shops, restaurants and leisure facilities are closed and strict contact restrictions apply.
The “economic picture remains divided,” BMWi noted. While Germany’s industry sector continued to develop robustly, the service sector including hospitality, arts and entertainment was “heavily restricted” by the measures to contain the COVID-19 pandemic.
BMWi noted that the further development of the German economy would largely depend on how quickly the rise in the number of infections during the winter could be contained.
Economic growth in the euro area is expected to be at 4.9 percent this year, according to a recent report by the European Forecasting Research Association for the Macro-Economy (EUROFRAME).
A significant economic recovery in Europe is likely to start when large parts of the population are vaccinated and COVID-19 infections fall significantly, which is expected from the second quarter onwards, the Kiel Institute for the World Economy (IfW Kiel), part of the EUROFRAME Group, noted on Monday.
“In the areas of personal services and private consumption, there is a lot of catch-up potential,” looking at vacation or visits to restaurants,