Economics
German Economy May Shrink After Virus Flare-Up, Bundesbank Says
- Economy seen stagnating or even contracting in fourth quarter
- Central bank says fiscal policy must remain supportive in 2021
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The German economy could stagnate or even shrink in the final three months of the year after a spike in coronavirus infections forced the government to impose new curbs on public life, the Bundesbank said.
While domestic restrictions are weaker and more focused on hospitality and leisure activities than in the spring, exports are suffering from a resurgence of the virus across Europe, the institution said in its monthly report. On balance, it expects the hit to the economy to be less severe than after the lockdown in March and April.