German Economy Shrinks 2.3 Percent in Q1 on Coronavirus Impact

Earlier this month, the European Commission forecast that eurozone GDP will see a 7.7 percent decrease in 2020 amid the coronavirus pandemic, after growing by 1.2 percent in 2019.

The German economy has suffered its worst contraction since 2009, shrinking by 2.2 percent in the first quarter of the year due to the COVID-19 pandemic.

"Economic performance slumped heavily... in a year-on-year comparison. The GDP in the 1st quarter of 2020 was down a price-adjusted 1.9%, and a calendar-adjusted 2.3%," the federal statistics agency said Friday.

A study by the German economic institute Ifo previously showed that the country's economic output had plunged by 16 percent due to the coronavirus-induced shuttering of businesses across the country and predicted that the nation’s gross domestic product could plummet by 12 percent in the second quarter.

Besides the predictions by the German institute, earlier this month the European Commission also downgraded its forecast for Germany's GDP dynamics in 2020. It expects the country's GDP to fall by 6.5 percent instead of growing by 1 percent, as was forecast earlier.

At the same time, in a move to kickstart the economy, the German authorities loosened coronavirus-related restrictions on 20 April with shops, restaurants, and production starting to reopen.