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Germany sees strong economic rebound, no second virus lockdown

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A sign advertising the sale of FFP2 protective face masks is taped to a lamppost in Berlin March 4, 2020. PHOTO: AFP

Germany is in a V-shaped economic recovery as it bounces back more strongly than expected from the effects of the first phase of the coronavirus pandemic, the economy minister said Tuesday.

German GDP is expected to fall 5.8 percent in 2020, a smaller recession than the 6.3 percent drop projected earlier, Peter Altmaier said, in a signal that the country is emerging from the worst of the crisis.

Altmaier said Europe’s largest economy was seeing “an unfortunately strong slump but then an unexpectedly fast recovery”.

Before a press conference, the minister showed off a printed V-shaped chart for assembled photographers.

The German economy slumped 9.7 percent in the second quarter of 2020, the “sharpest decline since quarterly GDP calculations for Germany began in 1970,” the federal statistics agency Destatis said previously.

However, the “low point of the recession” passed in May, according to the economy ministry.

Altmaier said Germany “can and will” avoid lockdowns like Germans lived through in March and April.

“Rising infection rates will be countered by targeted and regionally limited measures, so that the economic recovery can continue to develop gradually in the coming months,” he said.

The German economy is expected to grow 4.4 percent in 2021, although pre-crisis GDP levels will not be seen again until 2022.

Recent surveys have already shown an improvement in business sentiment in the country.

Last week, the Ifo Institute said its monthly barometer of business confidence showed that companies were growing more and more positive about the economic situation, after the index plummeted to record lows in April.

“The German economy is on the road to recovery,” Ifo President Clemens Fuest said.

German Purchasing Managers’ indices, another measure, have also shown expansionary trends since July.

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