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German economy shrank five per cent in COVID-hit 2020 as lockdowns wipe businesses

State statistics office Destatis said on Thursday that only the construction sector showed an upturn as industry and services saw deep declines.

Published: 14th January 2021 04:02 PM  |   Last Updated: 14th January 2021 04:02 PM   |  A+A-

A cargo ship passes on the river Main with the buildings of the banking district in background in Frankfurt

A cargo ship passes on the river Main with the buildings of the banking district in background in Frankfurt. (File photo| AP)

By Associated Press

FRANKFURT: The German economy shrank by 5 per cent in the pandemic year 2020, bringing to an end a decade of growth as lockdowns wiped out much business and consumer activity. The pandemic downturn was smaller than that experienced during 2009, when the economy shrank by 5.7 per cent.

The state statistics office Destatis said on Thursday that only the construction sector showed an upturn as industry and services saw deep declines. Agriculture, financial services, real estate and information and communication suffered smaller declines.

Industry fell 9.7 per cent while services including cultural and sporting events, which have suffered widespread cancellations, fell 11.3 per cent.

The 2020 figure compares to modest growth of 0.6 per cent in 2019. In 2020, the economy seesawed between lockdowns and a robust upswing that still left growth below the previous year. The worst quarter, the second, saw a quarter-on-quarter plunge of 9.8 per cent followed by a rebound of 8.2 per cent in the third.

In the fourth quarter, growth "roughly stagnated", said Michael Kuhn, head of the GDP and output calculation group at the agency. He said that since very little data was available for December, when the latest round of lockdowns hit, the agency was not making an official estimate. The fourth-quarter figure is to be announced on January 29.



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