German govt slashes GDP growth forecast as extended lockdown bites

Chancellor Angela Merkel and state leaders agreed last week to extend the lockdown until mid-February as Germany, once a role model for fighting the pandemic, is struggling with a second wave and record daily numbers of COVID-19 deaths.

The German government on Wednesday slashed its growth forecast for Europe's largest economy to 3% this year, a sharp downward revision from last autumn's estimate of 4.4% caused by a second coronavirus lockdown. "We are currently seeing a flattening of the number of infections, which is giving hope," Economy Minister Peter Altmaier said, but he cautioned that the situation remained serious due to a more infectious virus variant.

"We must therefore not gamble away what has been achieved," Altmaier said against the backdrop of calls to ease lockdown measures soon. Chancellor Angela Merkel and state leaders agreed last week to extend the lockdown until mid-February as Germany, once a role model for fighting the pandemic, is struggling with a second wave and record daily numbers of COVID-19 deaths.