That is the result of a forecast by leading German economists

In 2019, the German economy grew by 0.6 percent – that was significantly less than in the two previous years.

The industry association called on the federal government to act. Economic policy measures would have to be agreed quickly in the coalition and, if possible, decided before Easter. It would make sense, without further delays, to put the regulations for a simplified short-time work into force, as in the years of the financial crisis 2008/2009. "Germany cannot slide into a recession without seeing it", is it [called. 

Industry demands investment

The federal government should examine both targeted support and long-term growth measures. According to the BDI, there is already a massive investment backlog in Germany. Investments in traffic and digital infrastructure, in education, research and climate protection are necessary. "What is needed is a reliable investment package that will run for at least ten years, with initial measures before the end of this year."

The BDI also advocates the policy of "black zero" to loosen – a federal budget without new debt. "It would be fatal to let future investments fail because of a black zero. It cannot be a dogma", is it [called.

On the other hand, the constitutionally anchored debt brake is not available. In order to stimulate private investments, the BDI reiterates demands for a reform of corporate taxes.

BDI brings economic stimulus programs into play

On Sunday, the leaders of the Union and the SPD want to discuss possible measures in the coalition committee. Economics Minister Peter Altmaier (CDU) had presented a three-step plan to cushion the economic consequences of the corona virus. The plan provides for existing instruments such as loan programs for troubled companies to be expanded and financially increased if necessary.

In a final stage would be "further structural and economic measures" conceivable. These could be economic stimulus programs worth billions.

From the BDI’s point of view, the coronavirus has dramatically reduced the chances of a recovery in the global economy that had been hoped for until recently this year. Above all, the export-strong German industry was in a difficult situation even before the virus broke out. Industrial production has fallen, and companies are reluctant to invest.

The global economy could suffer massively from the corona virus

The economic consequences of temporary production and transport interruptions, especially in China and other parts of the world, are already now "serious"According to the BDI report. The virus is likely to cost a good half a percentage point of global economic growth this year.

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If the epidemic spreads more strongly in Europe and other regions of the world and is only brought under control in the medium term, an even more severe decline in the global economy can be expected. In Europe, Italy – due to the local infection cases – and Germany because of the economic ties with Asia "particularly a risk of recession" exposed.

Sources used: dpaBDI news agency quarterly report Germany QI-2020

The corona crisis has bottomed out, say the economic researchers from Kiel. Now the brakes have to be released so that consumers can spend the money they have saved.

According to estimates by the Kiel Institute for the World Economy (IfW), the corona crisis will lead to a drop in economic output of 6.8 percent over the year and will cost around one million jobs at its peak. This is what the institute wrote in its economic forecast published on Thursday.

"The bottom of the crisis is behind us", said IfW economic chief Stefan Kooths. "That is still not the all-clear, because the low point was extremely low." In the second quarter, the gross domestic product is likely to have shrunk by 12 percent. The corona crisis thus marks the sharpest economic downturn in the Federal Republic of Germany.

Tax cut should lead to more consumption

In the second half of the year, the Kiel researchers expect production to pick up a little more strongly. The temporary reduction in VAT could lead to pull-forward effects, especially for durable consumer goods, which, however, will have more of a dampening effect next year. Overall, the IfW expects growth of 6.3 percent in the next year.

Konjunktuparket: The VAT cut really brings so little

The IfW experts see the federal government’s economic stimulus program as critical. The economic slump is largely due to a decline in private consumer spending due to a lack of consumer opportunities.pro choice argumentative essay

Germans save more in the crisis

In the first half of the year, purchasing power accumulated to the amount of 80 billion euros, and over the year even 130 billion euros. This is expressed in a sharp increase in the savings rate, which was at an all-time high of 23 percent in the second quarter and should be 17.3 percent for the year, after 10.9 percent in 2019.

"This purchasing power will be released into consumer demand as soon as circumstances allow it again"said Kooths. "You don’t have to push consumption, it is enough for the brakes to be released."

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On the labor market, short-time working can only partially cushion the sharp decline in production. The Kiel researchers expect an additional million unemployed and an unemployment rate of 6.1 percent this year, after 5.0 percent in the previous year.

Sources used: dpa news agency

The German economy is recovering from the Corona crisis. That is the result of a forecast by leading German economists. But this recovery is arduous – and very uncertain.

The leading German economic institutes expect economic output to decline by 5.4 percent this year. In the coming year they are assuming an increase of 4.7 percent. 

The five institutes announced on Wednesday. On behalf of the Federal Ministry of Economics, they submit their so-called joint diagnosis twice a year.

With the current forecast, they have corrected their expectations for the spring significantly downwards. In April, the economists had predicted in their spring report that economic output would shrink by 4.2 percent for the whole year; In 2021, however, the gross domestic product should grow by 5.8 percent. 

"Much of the slump from the spring has already been caught up, but the remaining catching-up process represents the more arduous journey back to normal", said Stefan Kooths, economic director of the Kiel Institute for the World Economy (IfW).

High uncertainty due to increasing numbers of infections

The researchers assume that the pre-crisis level will not be reached until the end of 2021, i.e. ultimately the economic output of 2019. However, this level is 2.5 percent below what would have been achieved without the corona pandemic.

According to the economists, the economy will not return to normal capacity until the end of 2022. However, the researchers point out that their prognosis is uncertain – given the increasing number of infections.

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The IfW Kiel, the Leibniz Institutes for Economic Research in Halle (IWH) and Essen (RWI), the German Institute for Economic Research (DIW) and the Munich Ifo Institute are involved in the joint diagnosis.

Sources used: Press release of the Joint Economic Forecast with material from the AFP news agency

The prices for crude oil are on the move again. After a price slide at the beginning of the week, prices for the two most important types of oil went down again early on Wednesday.

Oil prices continued to decline on Wednesday morning after the heavy losses on the first two trading days of the week. A barrel (159 liters) of the North Sea Brent cost $ 39.60, which is another 18 cents less than on Tuesday, when the price had been below the $ 40 mark for the first time since June.

The Brent price has thus lost around 15 percent compared to the post-Corona crash high of $ 46.53 at the end of August. The trend is similar for the price of a barrel of the US West Texas Intermediate (WTI) variety. This fell another 24 cents on Wednesday morning to $ 36.54.

The WTI price is thus almost 17 percent below its interim high reached in the last week of August. The main reason for the drop in oil prices in recent weeks was the increasing uncertainty about the strength of the global economic recovery after the corona shock and fear of a second wave of the corona pandemic. There are also concerns that the trade dispute between China and the United States will flare up again.

Oil prices are still above the Corona lows

Despite the recent decline, both oil prices are still well above the Corona low in April. A barrel of Brent crude at times cost less than $ 16. The price of WTI oil had even slipped into negative territory for a few hours in April – that is, buyers got paid for buying oil.

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The reason for this was full oil stores on the west coast of the USA, as demand collapsed as a result of the corona crisis. Since there were also many fully loaded tankers off the coast, sellers were at times willing to pay money just to get rid of the cargo.

Sources used: dpa news agency

The coronavirus is putting the global economy under pressure: The International Monetary Fund fears a massive economic slump – as bad as it has been since the Great Depression in the 1930s.

Due to the Corona crisis, the International Monetary Fund has lowered its estimates for the global economy within a few months more than ever before. "The world has changed dramatically in the past three months", it said on Tuesday in the IMF world economic outlook. 2020 will likely bring the worst recession since the Great Depression in the 1930s.

"This crisis is like no other so far." The economic situation is even worse than in the 2008/09 financial crisis. The IMF expects a strong recovery for next year, but admits that this estimate depends primarily on the duration of the pandemic and can ultimately be wasted.

According to the IMF, the global economy will shrink by three percent in 2020. This reduced the January estimate by a whopping 6.3 points. During the financial crisis, the world economy had stagnated, at that time it was primarily industrialized countries that were affected. But now all countries are de facto affected.

Economy in the euro zone is likely to shrink by 7.5 percent

The IMF viewed the rapid and extensive rescue programs of numerous governments, which add up to several trillion dollars, as positive. In addition, there would be aid from central banks around the world. According to the IMF, a gradual recovery should set in in the second half of the year. In 2021 the global economy should then grow by 5.8 percent.

For the USA, the world’s largest economy, the IMF expects a minus of 5.9 percent in 2020. The economy of the euro zone is likely to shrink by 7.5 percent, Germany’s economic output by seven percent. The situation looks worse in Italy and Spain, which are particularly hard hit by the pandemic.

Here the IMF expects a minus of 9.1 and 8.0 percent respectively. The emerging and developing countries together are likely to lose one percent of their economic output.

Germany could recover strongly again in 2021

The estimates are better for China, where restrictions on public life have already been relaxed again. According to the IMF, the economy of the People’s Republic is likely to grow by 1.2 percent in 2020 – and by 9.2 percent in 2021. For the other countries, too, the fund expects more or less strong recoveries – for Germany, for example, an increase of 5.2 percent in 2021.

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The pandemic could turn out to be more permanent, the IMF report said. This is currently the biggest unknown in the estimates. If the health situation does not improve in 2021, the estimates for the global economy could in the worst case deviate by eight percentage points – then the recession would then continue next year.

Sources used: Reuters news agency

German exports have never fallen as sharply as they are now during the Corona crisis. This has serious consequences – for companies, but also for consumers. You can read about them here.

overview

Why is the slump in exports so significant? In which target countries have exports slumped in particular? Which industries are hit hardest – which are hit the least? What does that mean for me? What’s next?

German exports slumped dramatically in April as a result of the Corona crisis. The value of goods exports fell compared to the same month last year by 31.1 percent to 75.7 billion euros, as the Federal Statistical Office announced on Tuesday in Wiesbaden.

The closing of borders, especially in the European internal market, the global imposing of trade and travel restrictions as well as enormous disruptions in sea and air freight led to a drastic decline in exports. Imports decreased by 21.6 percent to 72.2 billion euros compared to the same month last year.

But what does this decline in exports actually mean? Which industries are particularly affected? The most important questions and answers at a glance.