Economic recovery Is Germany’s upswing lagging behind?
Status: 11.06.2021 6:09 p.m.
The corona numbers are falling, economic life is normalizing and the economy is picking up again. Germany seems to be lagging behind its neighbors. Is it really like that? From Lothar Gries, tagesschau.de The British economy grew by 27.6 percent in April compared to the same month last year – a record as the National Statistics Office (ONS) announced. The strong growth figures reflect the economic recovery in the wake of the gradual opening of the economy, which crashed in spring 2020 after the start of the pandemic and the following protective measures. Projected over the year, the British central bank now expects an increase in gross domestic product (GDP) of 7.25 percent. That would be the highest growth rate since 1941. Other European countries such as France are also assuming a strong economic recovery of 5.5 to 5.7 percent for the current year. The Spanish government even expects an increase of 6.5 percent. In fact, in the opinion of most economists, the prospects for economic growth in the euro area have brightened significantly in view of the falling number of corona infections and the global economic recovery. According to the latest information, the European Central Bank (ECB) is therefore assuming an increase in GDP in the euro area of 4.6 percent this year.
Economic growth Bundesbank expects strong upturn The economists at the Bundesbank have significantly raised their economic forecast for the current year.
Germany far behind in terms of growth
After a strong upward trend, things should go up in the USA, which is still the largest economy in the world. There, the Federal Reserve (Fed) is expecting an increase in economic output of 6.5 percent with a view to the advanced vaccination campaign and the prospect of an economic stimulus package. In China, Germany’s most important trading partner, the economy is likely to grow by as much as 8.5 percent this year. And Germany? Lies far behind in one of the farthest places. The Bundesbank currently expects GDP growth of 3.7 percent for 2021. Federal Minister of Economics Peter Altmaier is even more optimistic. “Thanks to extensive government aid of almost 300 billion euros, the German economy survived the worst of the coronavirus crisis. This year, growth of three and a half to four percent would be possible,” said the minister.
More than four percent growth EU Commission increased Economic forecast The European economy will apparently recover more from the consequences of the Corona in 2021 than expected.
So is the recovery of the domestic economy lagging behind that of its most important trading partners? The economists of the Organization for Economic Cooperation and Development (OECD) give a differentiated answer. It is true that the economy in countries that quickly vaccinate their population against Covid-19 and that contain the infection rate through effective measures is recovering faster than elsewhere.
Already in the summer pre-crisis level
In South Korea and the United States, for example, per capita income is likely to have reached pre-pandemic levels by the end of this month. In large parts of Europe, however, this will only be the case after three years, in Mexico and South Africa it may take five years or more, the OECD fears. Seen in this way, Germany is in a much better position than when looking at the bare growth figures. The Bundesbank estimates that economic output could reach pre-crisis levels again this summer. The economists of the OECD expect that this will not be the case until the end of the year.
Trillions for the economy Is the US economy threatened with overheating? Inflation is even higher in the United States than in Germany.
Nevertheless, the recovery in Germany would still be faster than in Italy, France or Spain. In these countries, GDP per capita is unlikely to be above the level of the end of 2019 until the middle of next year, according to the forecast of the OECD. It looks particularly bleak for Spain, whose economy will not be above pre-crisis levels again until the summer of 2023. The experts predict that Great Britain will not return to pre-crisis levels until the middle of next year.
|country||GDP change 2020||GDP change 2021||GDP change 2022|
|Germany||-5.1%||+ 3.3%||+ 4.4%|
|France||-8.2%||+ 5.8%||+ 4.0%|
|Italy||-8.9%||+ 5.5%||+ 4.4%|
|Spain||-10.8%||+ 5.9%||+ 6.3%|
|Great Britain||-9.8%||+ 7.2%||+ 5.5%|
|United States||-3.5%||+ 6.9%||+ 3.6%|
|China||+ 2.3%||+ 8.5%||+ 5.8%|
Fatal dependence on tourism
This shows the great dependence of these states on the service sector and especially on tourism. In Spain, for example, this industry slumped by 48.4 percent last year, in Italy by 35.1 percent, in Greece even by 55.4 percent, while in Germany it fell by almost 15 percent. Accordingly, GDP fell less sharply in Germany last year than in most of the neighboring countries. This is also due to the comparatively higher share of industry in the overall economy and its unchanged strong exports to China. “How strong the economic recovery will be in each country depends on the level of government support for businesses and vulnerable workers, the degree of dependence on certain industries such as tourism, and health and vaccination policies,” said a May report Study by the OECD. Despite the global economic recovery, global income is likely to be around three trillion dollars lower than before the pandemic by the end of 2022, the OECD estimates. This roughly corresponds to the performance of the French economy.