Pandemic creates ‘striking hole’ in German economy – EURACTIV.com

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The COVID-19 pandemic has so far cost the national economy 350 billion euros, according to new data released by the German Economic Institute on Sunday. At the same time, the government has revised down its growth forecasts for 2022.

According to the institute’s analysis, the bulk of the country’s economic losses since the start of the pandemic have been due to a drop in private consumer spending. Consumers spent less on activities like outdoor dining and cultural events due to lockdown measures and cautious behavior, the study authors explained.

The pandemic has also had an impact on investments. The researchers estimated that without the pandemic, companies would have invested an additional €60 billion over the past two years.

“Recovery will take years,” the paper read, adding that while 2022 turns out to be a strong year, the pandemic will leave a “marked gap” in Germany’s economic performance.

In addition to lower consumption and investment, disruptions to global value chains have had a significant impact, as additional border controls have hampered imports and exports.

On Friday, the government significantly lowered its growth forecast for 2022.

While the government had hoped for a strong economic recovery this year, Economy Minister Robert Habeck said he now expects GDP to grow by just 3.6%, against previous estimates. by more than 4%.

(Julia Dahm | EURACTIV.de)

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