Germany Enters Recession Due To Coronavirus Pandemic

The German economy is now in a recession according to data released Friday by the country’s Federal Statistical Office, Statistisches Bundesamt. The authority announced “The corona pandemic hits the German economy hard … [Q1’s contraction] was the largest decrease since the global financial and economic crisis of 2008/2009 and the second-largest decrease since German unification.”

Europe’s biggest economy shrank 2.2% in the first three months of the year. The eurozone economy fell by its sharpest rate on record at 3.8% in the first quarter.

Economists, including those at Deutsche Bank, expect a worse slump in the second quarter as the full effects of the lockdown become apparent. Chancellor Angela Merkel has warned that if the coronavirus’ transmission rate worsens, Germany could return to the lockdown measures.

Throughout the recession and the covid-19 crisis, the number of banks charging negative interest rates in Germany has been climbing rapidly. That number has grown to more than 100 banks.

Among banks charging negative interest rates, 94 of them have published their rates online or on their account price sheets. Ten more banks are charging fees on overnight deposit accounts which are usually free, therefore creating de facto negative interest rates on these accounts. In addition, the consumer portal noted that based on media reports, 22 other banks are charging negative interest rates but they have yet to publish their rates online.

[image: Wikimedia Commons]

 

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