German economy close to stagnation due to coronavirus outbreak

UNITED STATES (OBSERVATORY NEWS) — The German economy was close to stagnation in the first quarter due to an outbreak of coronavirus, reports Reuters, citing the DIW Institute for Economic Research.

According to DIW estimates, German GDP in the first quarter will increase by only 0.1% compared with the previous quarter.

“However, the effect of coronavirus is still unclear and cannot be quantified,” said Klaus Michelsen, director of the DIW business unit.

Data from the Federal Statistical Agency of Germany (Destatis) this week showed that Germany’s GDP in the fourth quarter of 2019 did not change compared to the previous three months. Net trade reduced GDP growth by 0.6 percentage points.

In 2019, Europe’s largest economy has grown by 0.6%, at the lowest rate since the debt crisis in the eurozone in 2013.

The outlook for Germany’s export-dependent economy is overshadowed by an outbreak of coronavirus , which strikes global supply chains.

German industry will suffer especially if the outbreak of COVID-19 disrupts the supply of bulk goods from China, Michelsen warned.


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