The German Institute For Economic Research Raises Its Forecast For 2020 GDP

The German Institute for Economic Research said that it expects the country’s economy to decline by 6% this year due to the Coronavirus pandemic, revised by raising its previous estimate of a contraction of 9.4%.

“The German economy is doing very well, given the circumstances,” said Klaus Michelsen, an analyst at the institute.

For the next year, the institute raised its GDP growth forecast to 4.1% from 3% in June but warned that the pandemic could still trigger setbacks.

“It would be a mistake to think that the crisis will end quickly,” said Marcel Fratzscher, head of the institute.

The German economy contracted at an unprecedented rate of 9.7% in the second quarter, and the deflation was expected to be accompanied by a wave of bankruptcy and massive unemployment were it not for the government’s countermeasures.