German experts see economy shrinking 5.1 per cent this year

The German government's panel of independent economic advisers is predicting that the country's economy, Europe's biggest, will shrink by 5.1 per cent this year — a somewhat more optimistic forecast than one made recently by ministers.

The German government's panel of independent economic advisers is predicting that the country's economy, Europe's biggest, will shrink by 5.1 per cent this year — a somewhat more optimistic forecast than one made recently by ministers. In a report released Wednesday, the five-member German Council of Economic Experts predicted that gross domestic product will grow by 3.7 per cent in 2021.

At the end of October, Economy Minister Peter Altmaier predicted a 5.5 per cent contraction this year, followed by 4.4 per cent growth next year. The experts said their forecast takes account of the resurgence of infections over the past two months and of new measures taken in an effort to curb it. Germany is just over a week into a four-week partial shutdown, with restaurants, bars, sports and leisure facilities closed and new contact restrictions imposed. This time, schools and nonessential shops have remained open.

“The economic situation remains fragile due to the sharp rise in infections,” panel chairman Lars Feld said in a statement. “How the pandemic can be contained and how foreign economies develop are key to the further development of the economy.” Many other countries in Europe have imposed more or less drastic restrictions to curb surges in new cases across the continent that are, in several cases, more severe than Germany's..