Germany and France, the EU’s two largest economies, are bracing for a painful recession as the coronavirus pandemic slashes output to the lowest levels in decades, forecasts said on Wednesday.
Gross domestic product in export powerhouse Germany is expected to shrink by nearly 10 per cent in the second quarter as shutdowns aimed at slowing the outbreak paralyse the global economy, the country’s leading research institutes said in a report.
Germany’s second-quarter plunge in GDP should be twice as big as any during the 2008-2009 financial crisis and would mark the steepest fall since the institutes’ records began in 1970.
“The corona pandemic will trigger a serious recession in Germany,” the six institutes including Ifo, DIW and RWI said, estimating that the economy already contracted by 1.9 per cent year-on-year in the first quarter.
France is already in a technical recession, the Bank of France said, after official data showed the economy shrank 0.1 per cent in the last quarter of 2019, and current estimates suggest it contracted around six percent in the first three months of 2020.
A recession is defined as two consecutive quarters of economic contraction.
