Germany’s Economy Suffers Biggest Quarterly Drop On Record

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The buildings of the banking district are seen in Frankfurt, Germany. Government statistics show the economy contracted by 10.1% in the second quarter of this year.

Michael Probst/AP

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Michael Probst/AP

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3 Months Of Hell: U.S. Economy Drops 32.9% In Worst GDP Report Ever

Germany’s sharp drop in output pales in comparison, however, to the 32.9% plunge in U.S. gross domestic product for the same period — the steepest quarterly downturn ever recorded for the American economy. More than 4.4 million people in the United States, about 1.3% of its population, are known to have contracted the coronavirus.

Despite the economic contraction, Germany has not suffered a large loss of jobs. Unemployment for June stood at 4.5%, according the Federal Statistical Office, while the number of people employed fell by 1.4% compared to this year’s first quarter.

German firms surveyed this month by the Ifo Institute in Munich showed increasing optimism about economic recovery. That was reflected in a rise in the Ifo Business Climate Index from 86.3 points in June to 90.5 points in July.

Still, Germany’s prospects remain closely tied to the pandemic’s impact elsewhere.

«The extremely export-oriented German economy is likely to suffer all the more, notes DW’s Böhme, «as important markets like the US, as well as countries like Brazil and India, are not really getting the pandemic under control.