German economy set to grow rapidly in summer months – Bundesbank

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FILE PHOTO: A view of the empty center of Rheda-Wiedenbrueck is pictured, as the outbreak of the coronavirus disease (COVID-19) continues, Germany June 23, 2020. REUTERS/Leon Kuegeler/File Photo

FRANKFURT (Reuters) – Germany’s economy is poised for a rapid and broad-based recovery after an unprecedented peacetime contraction in the spring, but a coronavirus vaccine may be needed before a full rebound is possible, said the Bundesbank on Monday.

Europe’s biggest economy shrank by a tenth in the second quarter, but has made a comeback since much of the outbreak was contained and many restrictions on businesses and daily life were lifted .

“The clear and broad-based recovery in macroeconomic performance, which started after the low point in April, will continue,” the central bank said in a monthly report.

“The German economy is expected to grow very strongly in the summer quarter of 2020,” he said.

Private consumption should make a “solid contribution” to the rebound, while investment in industry and capital goods will also be key, said the Bundesbank, which previously forecast a 7.1% decline in gross domestic product. in a full year.

Still, the bank warned that the pandemic has not been contained globally and that this will weigh on German exports and industrial production.

“This risks hampering an overall recovery in demand for German industrial products,” he said. “Until an effective medical solution, such as vaccination, is available, economic activity in some domestic service industries will also remain limited.”

Reporting by Balazs Koranyi; Editing by Hugh Lawson

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