German govt cuts GDP growth estimate amid extended lockdown

Europe’s largest economy, Germany, on Wednesday lowered its GDP growth forecast to 3% this year from a previous 4.4% estimate as coronavirus lockdowns persisted and stalled economic activities.

Chancellor Angela Merkel and state leaders concurred to extend the imposed lockdowns in Germany until mid-February. This is due to the country’s continues to struggle curbing the second wave of the virus and record daily numbers of COVID-19 deaths.

The German economy declined by a smaller-than-expected 5% in 2020. It still posted the second-biggest economic downturn in post-war history.

Moreover, German business morale fell to a six-month low in January as the second wave of coronavirus ducked the recovery, while sentiment among exporters in the industrial sector significantly increased.

Concurrently, the GfK consumer index released on Wednesday showed consumer morale fell for the fourth consecutive month heading into February.