Germany cuts GDP growth in 2020 to -6.3% from 1.1% predicted in January

Germany has cut its estimate for gross domestic product growth in 2020 to -6.3% from +1.1% predicted in January, the economy ministry said on Wednesday. 

The minister predicted that the coronavirus pandemic would plunge Europe's largest economy into the deepest recession in its post-war history.

It expects the recession to bottom out in the second quarter and economic activity to pick up again after that.

For 2021, the government expects the economy to rebound with an expansion rate of +5.2%. The forecasts are based on the assumption that authorities can gradually unwind lockdown measures to contain the spread of the coronavirus.

The German economy will contract by more than 6% this year, the DIW economic institute said on Wednesday, adding that the recession prompted by the coronavirus pandemic would be deeper than during the 2008 financial crisis.

DIW said Europe's biggest economy likely contracted by 2% in the first quarter and will shrink by 10% in the April-June period as large sectors of the economy were brought to a standstill by the outbreak.

(With inputs from Reuters)