The economy recovers in the summer: Bundesbank expects very strong growth

Because of the measures to contain the corona pandemic, the German economy collapses massively in the first half of the year. The Bundesbank now sees the bottom of the valley and predicts “very strong” economic growth. Nevertheless, the outlook remains bleak.

According to the Bundesbank, the economy is currently picking up strongly and is thus recovering from the corona shock of recent months. “After the sharp slump in the first half of the year, the German economy should grow very strongly in the summer quarter of 2020,” says the central bank’s monthly report.

According to this, “the clear and broad-based recovery in overall economic performance, which began after the low in April, will continue from today’s perspective”. The way back to normal is still a long way. “Regardless of the ongoing catch-up movement, the pre-crisis level will, however, still fall significantly short in the summer quarter and beyond.”

In the first half of the year, the German economy collapsed due to the measures taken to contain the corona pandemic. Historically, the crash was 10.1 percent compared to the previous quarter in the second quarter. In March and April, parts of the German economy virtually stood still. The situation was similar in many other large economies, which put a drastic strain on foreign trade. Experts are predicting growth again for the current quarter. According to the Bundesbank, investment in equipment should pick up in the course of the recovery in industry.

High uncertainty remains

A solid contribution to the overall recovery can also be expected from consumer spending. The decisive factor is that the pandemic-related restrictions have been significantly relaxed. In addition, the situation on the labor market is stabilizing somewhat.

However, the virus pandemic has not yet been contained in many countries internationally. “This affects German exports.” In addition, the high level of uncertainty about the further course of the infection is dampening companies’ willingness to invest. Until an effective medical solution – such as a vaccination – is available, “economic activity in some domestic service sectors will also remain limited”.

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Gualtieri, ECB ruling without consequences – Last Hour

(ANSA) – ROME, MAY 05 – “I am sure that a clarification
will happen quickly and the sentence will not have any
practical consequence “allowing the Bundesbank to continue to
participate in Qe. Economy Minister Roberto said so
Gualtieri, commenting on the sentence of the Constitutional Court
German during a hearing at the Finance and Committees
Senate budget. According to Gualtieri, the judges’ findings
“they concern procedural aspects”, moreover “they have reiterated the
full legitimacy “of the PSPP and” do not concern in any way ”
the new Pepp.

Gualtieri also stressed that “the ruling” of the
German Court “in no way affects policy measures
monetary policy hired by the ECB to deal with the Covid emergency,
including the Peep program and its mode
implementation “. (ANSA).

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