German economy shrinks by record 10.1% in Q2

[BERLIN] The German economy contracted by 10.1 per cent in the second quarter, its steepest plunge on record, as household spending, business investment and exports collapsed during the Covid-19 pandemic, preliminary data showed on Thursday.

The statistics office said the plunge was the sharpest since 1970 and was worse than the 9 per cent contraction predicted by economists in a Reuters poll. It wiped out nearly 10 years of economic growth.

"Now it's official, it's the recession of a century," said DekaBank economist Andreas Scheuerle.

"What has so far been impossible to achieve with stock market crashes or oil price shocks was achieved by a 160 nanometre tiny creature named Corona."

On the year, gross domestic product in Europe's largest economy declined by 11.7 per cent from April to June, seasonally adjusted figures from the Federal Statistics Office showed. Analysts polled by Reuters had expected a 11.3 per cent contraction.

Both exports and imports of goods and services collapsed in the second quarter of 2020, as did household spending and investment in equipment. But state spending increased. 

REUTERS