“Decline of 5.0 Per Cent Is a Success”

The Federal Statistical Office today released its first estimate of the decline in gross domestic product (GDP) in 2020. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, comments on this matter:

“The GDP declining by 5.0 per cent in 2020 can be considered a success. Although Germany experienced a severe recession in 2020, it has so far come through the global recession relatively smoothly in a European comparison. Other EU economies have seen a double-digit GDP decline. The country’s good financial situation, but above all the resilience of the companies and their prudent management of the pandemic have saved the country from worse. The recession was even somewhat milder than in 2009, the year of the financial crisis, and the chances are good that we will see a faster recovery than back then. Besides a rapid vaccination of the population, however, this presupposes that factories can continue to produce. The discussion about extending the lockdown to further sectors of the economy therefore carries certain risks.”