Covid crisis costs Germany almost 300 billion euros

The Local
The Local - [email protected] • 23 May, 2021 Updated Sun 23 May 2021 16:32 CEST
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Tables and chairs are locked outside a closed restaurant in Cologne's old town on November 2, 2020 amid the novel coronavirus (Covid-19) pandemic. - To curb the spike in Germany, Europe's biggest economy, German Chancellor Merkel has ordered a round of shutdowns from November 2, 2020 until the end of the month. The tightening of coronavirus restrictions have triggered frustration and anger. Germany on November 2 added another 12,097 Covid-19 cases, bringing the total since the start of the pandemic to 545,027 cases. A total of 10,530 people have died so far. (Photo by Ina FASSBENDER / AFP)

The Covid-19 pandemic has had a huge financial impact on Germany with the German Economic Institute (IW) estimating the country would be 300 billion euros better off had it never happened.

"It will take years for the losses and structural upheavals to balance out," Michael Hüther, the head of the Cologne-based institute, told Germany's Welt am Sonntag on Sunday.

The institute's economists based their estimates on actual and forecast growth compared with that of so-called potential growth. 

Potential growth predicts how much the German economy would have grown in the past six quarters if the Covid-19 pandemic hadn't happened.

The past three quarters (Q4 2020 to Q2 2021) accounted for just under 140 million euros, with a little less than a third of this loss due to the lockdown that was imposed as a result of the second wave. Restrictions are only just beginning to ease as vaccinations progress and infection rates drop.

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"The vaccination rate is finally picking up, that is a signal to the economy that should not be underestimated," said Hüther.

"Nonetheless, we should not be under any illusion that the crisis will just not leave its mark. Without Corona, the economy would have grown significantly," he added.

 

 

 

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