1. Research
  2. Products & Topics
  3. Region
  4. Germany

Cautious lifting of corona restrictions with regional differences to remain

April 16, 2020
Region:
Merkel’s cabinet in consultation with the PMs of the 16 federal states agreed to partially lift containment measures but curbing health risks clearly dominated economic risks of a longer shutdown. The decisions taken will be reviewed on a bi-weekly basis with the next meeting of political leaders on April 30. A European coordination of (national) exit strategies is important for Germany given its strong economic interlinkages with other member states. [more]

More documents about "Germany"

270 (13-24)
May 14, 2020
Region:
13
The COVID-19 pandemic and, in particular, lockdown measures will push the German economy into its biggest slump since WW2. The COVID-19 pandemic hits German labour market differently than the Global Financial Market Crisis of 2009. First, it is acting almost simultaneously as a supply shock and, as a result of the measures to restrict contact, as a demand shock. Second, is the speed and the might with which it has brought the economy to a standstill in many areas of Germany and around the world. Third, private consumption will suffer the biggest blow. During previous periods of economic weakness, private consumption has always been a supporting pillar of the German economy and thus also provided a counterweight to employment losses in export-oriented companies. At present, however, the domestically oriented and personnel-intensive service sector is failing as a driver of employment. By April 26th, 751,000 companies had already registered for short-time work. This should imply an increase in the number of people actually on short-time work to up to 10 m. Despite the comprehensive measures to secure employment, which ultimately include support measures for companies, the number of unemployed persons is expected to climb to 3 m in 2020. Employment is likely to fall in 2020 by a good 1%. [more]
May 8, 2020
Region:
14
Weaker-than-expected March hard data and shocking April survey data point to a lower trough in economic activity than assumed so far. We now see Q2 GDP falling by 14% qoq, with the risks still skewed to the downside. In the 2009 recession, private consumption acted as a massive shock absorber. Given the lockdown, social distancing and a likely severe hit to income expectations, we expect private consumption to fall by 10% in 2020. The asynchronous global development of the COVID-19 pandemic and lasting impediments to global trade, will make the recovery, which began in May and will become more evident in H2, less dynamic than hoped for earlier. As a result, we expect German GDP to decline by 9% this year and to expand by about 4% in 2021. [more]
May 5, 2020
Region:
15
The corona crisis is currently overshadowing all other aspects of the German property market. On the assumption of a strong recovery in the second half of the year structural issues will return to the foreground and the pandemic will slow down, but not bring an end to the German property cycle. In this report we look into both the negative effects of the crisis and fundamental factors and assess the outcome for the German house and office market. A flight to safety and the potential increased immigration could have a positive impact in the medium term. [more]
May 5, 2020
Region:
Analyst:
16
Due to the coronavirus, production in the manufacturing sector in Germany is expected to fall by roughly 10% to 15% in real terms in 2020. Society and business will learn to live with the coronavirus and weigh up health, social and economic risks in the process. In 2021, industrial production could rise by more than 10% in real terms on average over the course of the year. However, overall we see a risk that Germany may become less attractive as an industrial location over the coming years. Policymakers and industrial companies are likely to view the crisis surrounding the coronavirus as an opportunity to make important political decisions and get structural reforms off the ground, as they should. [more]
April 29, 2020
Region:
Analyst:
17
The government’s coffers are not bottomless. That is why any money spent on cushioning the impact of the corona crisis should be used as efficiently as possible to achieve the maximum positive impact or compensate for the damage caused by the lockdown. Unlike other sectors, such as hotels or restaurants, car producers in Germany were and are not directly affected by the lockdown. Car dealers have re-opened. Moreover, a car-scrapping bonus scheme will cause customers to bring forward purchases, with sales declining in the following year. In addition, high-wage earners in particular will benefit from the financial windfall. Car sales in Germany play only a limited role for German carmakers’ overall profitability. And finally, subsidies for e-cars already provide an incentive to include environmental considerations in car-buying decisions. [more]
April 20, 2020
Region:
18
The COVID-19 crisis raises the question of whether the increased shift towards working from home will ultimately reduce demand for office space. The longer the crisis continues, the more people will get used to long-distance co-operation – and the more efficient remote communication may become. However, employees and teams experience the corona crisis very differently. Much depends on how well a team worked together pre crisis. [more]
April 17, 2020
Region:
19
The German government has responded quickly and decisively to the economic fallout from the corona pandemic. Altogether, Germany’s anti-crisis measures – consisting of extra spending, guarantees and loan/participation programs – sum up to an astronomic value of around EUR 1.9 tr (well above 50% of GDP in 2019). This gives the government huge scope to fight the pandemic and economic crisis. In this note we try to quantify Germany’s fiscal costs from the corona crisis. [more]
April 15, 2020
Region:
Analyst:
20
The coronavirus pandemic has struck the German mechanical engineering sector at an already difficult time. Since 2019 at the latest, mechanical engineering firms have been feeling the effects of a realignment in the industry, particularly as German automobile manufacturers shift towards electric mobility. On top of that, there was the possibility of unusual expenses due to the potential discontinuation of deliveries from China amid ongoing trade conflicts. Production may decline by 25% or more in 2020 as a result of the coronavirus. [more]
April 3, 2020
Region:
22
Due to the COVID-19 pandemic, uncertainties about the future development of German real estate prices have increased considerably. A global flight to safety should drive prices for residential properties up. In the short-run, the downturn in economic activity, particularly during the first half of 2020, and considerable uncertainty about the future as well as the psychological burden are likely to result in price declines. [more]
March 24, 2020
Region:
23
We identify the impact of negative rates on household portfolios in Germany. Real returns on cash and deposits stood at -1.2% in Q1 2019. Due to that, Germans lost around EUR 150 in real terms in 2019 per person, compared to the 1991-2014 average. The aggregate loss including claims on insurance for a representative household was roughly EUR 540 per year. The richest 10% of Germans hold 60% of the financial wealth and probably have significantly higher losses. In 2019, net lending to private households in Germany reached a new record of EUR 59.5 bn (+4.8% yoy). Mortgages saw a record increase of EUR 53 bn (5.3% yoy). Deposits rose by EUR 41.1 bn in the seasonally strong final quarter. In 2020, mortgage growth is likely to slump, even stagnate. The corona virus pandemic will probably lead to a reduction in household income and possibly to bottlenecks in the issuance of building permits. [more]
March 19, 2020
Region:
24
Fighting the corona crisis: Whatever it takes. The government’s support measures so far include greater access for firms to short-time allowance, tax moratorium and the potential provision of state guarantees of up to EUR 460 bn. We expect the government to come up with additional fiscal stimulus measures soon. The budget balance could post a deficit of 3.5% of GDP in 2020/21. (Also in this issue: KfW programmes to support corporate Germany – A primer. Corporate lending in a corona recession: Development banks as an anchor of stability?) [more]
6.9.4