Bundesbank: "German Economy May Recover to Pre-COVID-19 Level in Q3"

by Park Pyunghee

Published 20 Jul.2021 15:34(KST)

[Photo by Reuters-Yonhap News]

[Asia Economy Reporter Park Byung-hee] The German economy is expected to recover to pre-COVID-19 levels in the third quarter, according to Germany's central bank, the Bundesbank.

On the 19th (local time), Bloomberg reported that the Bundesbank analyzed in its monthly report released that day that the German economy is on the verge of almost fully recovering the losses caused by the COVID-19 pandemic.

The Bundesbank noted that because the German economy has a large manufacturing sector, it has weathered the COVID-19 crisis better than other European countries with a higher proportion of tourism industries.

Furthermore, assuming the pandemic situation does not worsen significantly and supply chain disruptions in the manufacturing sector gradually ease at least, the pace of economic expansion this summer is expected to accelerate. It also analyzed that real Gross Domestic Product (GDP) could recover to pre-COVID-19 levels in the third quarter.

The Bundesbank forecasted that the economic growth rate in the second quarter would be considerably high and even higher in the third quarter.

The Bundesbank did not make any separate remarks regarding the recent major issue of flooding in Germany.

Regarding the floods, ING analyzed that the impact on the German economy would be limited. ING stated that smaller family-owned businesses, rather than large corporations, suffered damage in the flood-affected areas.

The death toll from the major floods in Germany was reported as 166 in total as of that day, including 117 in Rhineland-Palatinate, the area most severely affected. Chancellor Angela Merkel plans to hold a federal and state prime ministers' meeting on the 22nd to agree on immediate disaster recovery funding of 400 million euros (approximately 540 billion won).