Germany is the latest European country to be walloped by the coronavirus recession as the country shows the worst-ever economic downturn since the global financial crisis of 2008, reported Business Insider on May 15.
If you thought that the rapidly ravaging coronavirus outbreak was the defining factor of 2020, think again. As most countries gradually ease the lockdown restrictions, they are faced with yet another devastating impact of the pandemic, the coronavirus recession.
Today, every country is getting to grips with the shattering coronavirus recession. But the question is – how deep? For Germany, the uphill battle against the slowdown started when the country’s IFO index last month painted a rather gloomy picture and plunged to an all-time low.
Since then, all hopes rested in May with the country hoping to make a recovery with the announcement of a massive economic bailout package and the easing of social distancing restrictions. Unfortunately, the two consecutive quarters of economic downturn came in earlier than expected as the country officially enters the coronavirus recession.
Europe’s most significant economic driver has slumped into recession with a contraction of 2.2 percent in the first quarter of the year. The decline marks the biggest ever quarterly slump since the worldwide economic crisis of 2008 and comes second only to the decrease during the German unification of 1871.
According to the recent data published by Destatis, German federal authority, the deadly pandemic was a severe blow to the German economy. Although the country did manage to shun the implications in the first two months of the outbreak, the figures from March, April, and May show that the pandemic and the subsequent lockdown measures got the better of us eventually, stated Germany’s data authority.
At the time of writing, over 100 German banks are charging negative interest rates and rapidly passing on the burden of the economic slackening to their customers. In addition, around 22 German banks are seriously considering taking this drastic step but have yet to announce the negative interest rates.
Crippling effects on EU and US
The report also shows that the overall European Union economy has declined by over 3.8 percent in this quarter, sadly corroborating the ECB’s predictions regarding the coronavirus recession and its impact on the EU.
While France and Spain were the biggest losers from the coronavirus recession, demonstrating a contraction of 5.8 percent and 5.2 percent respectively, the UK, too, painted a dismal picture by showing 2.2 percent shrink.
Meanwhile, in the west, the enforcement of strict social distancing protocols is building a strong case for the recession in the US as rising unemployment rates, decreasing retail sales and production activities continue to bring the country to its knees.