Thread by @SDullien

Today we have published our new @IMKFlash economic forecast for Germany. The seven highlights in a #Thread below.
The full text (in German) can be found here:
imk-boeckler.de/download-proxy…
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#1: The statement that the #Covid19-crisis was the deepest crisis in post-war history remains only partly valid. For the year 2020 as a whole, we now see a decline in GDP of 5.2%. In 2009 the decline was „only“ 5.6% according to current data. 2/

#2: Over the course of the quarter, however, the slump in the second quarter was still by far the most severe since the start of quarterly data collection. As a rebound, the 3rd quarter now sees a record increase. 3/

#3: The recovery remains incomplete. At the end of 2021, GDP will return to pre-crisis levels. In 2021 as a whole, GDP will increase by 4.9%. However, the level is still 3% below what a crisis-free development would have meant. 4/

#5: Above all, investments remain weak. At the end of the forecast period, investments in equipment are still a good 10% below pre-crisis levels. This is a sustained burden on German industry. 5/

#6: The slump in industry has accounted for about 2/3 of the German economic slump. So it was mainly interrupted supply chains and global weakness in demand that caused the crisis, not domestic contact restrictions. 6/

#7: Unemployment is likely to have passed its peak and is slowly declining. We expect unemployment to average 5.9% in 2020, and then again in 2021, although the monthly trend is slightly more positive. 7/

#8: Public finances are in better shape than many feared. Despite record economic stimulus programs, the debt ratio remains below 70 % in 2020 and will fall again next year. 8/

(Caveat: The forecast has a number of downside risks. For example, we assume that there will be no nationwide #Covid19 shutdowns in Germany in the winter, that there will be a clear US election result without unrest and that global trade conflicts will not intensify. 9/

Because these uncertainties are so great and capacities remain underutilized, financial policy should refrain from rapid consolidation. Instead, it should prepare further measures to support the economy, which can then be adopted quickly in an emergency). /END