German economy likely to shrink less this year than during 2009 crisis: IfW

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Updated: Sep 17, 2020 3:21 PM

IfW, one of the Germany's leading institutes and part of a group that advises the government, revised up its forecast from June, when it had predicted a decline of 6.8%.

German economy, IfW economic institute, Europe, coronavirus infections, latest news on german economyIn 2009, Europe's largest economy contracted by 5.7%. (Photo source: Reuters)

The German economy will likely decline by 5.5% this year due to the coronavirus pandemic, the IfW economic institute said on Thursday, meaning the slump would be less dramatic than during the 2009 financial crisis.

IfW, one of the Germany’s leading institutes and part of a group that advises the government, revised up its forecast from June, when it had predicted a decline of 6.8%. In 2009, Europe’s largest economy contracted by 5.7%.

“The German economy is on the road to recovery,” IfW said. It cautioned that a further improvement will be more difficult to achieve, pointing to a prolonged crisis in some sectors and a surge of new coronavirus infections overseas.
For next year, IfW revised its growth forecast up to 4.8% from its June prediction of 6.3%. IfW said it expected the economy to expand by 2.4% in 2022.

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