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Macroeconomic outlook report: Germany

Second quarter of 2020

During 2Q20, Germany´s GDP registered a significant decrease in its y/y growth rate, which stood at -11.26%. This decrease was due to the decrease in both external and internal demand, heavily affected by the containment measures carried out to contain the spread of the virus throughout most of the second quarter. The German labor market recorded an increase in the unemployment rate with respect to the previous quarter, registering a rate of 4.17%. On the other hand, the y/y growth rate of employment decreased from 0.30% during 1Q20 to -1.25% during 2Q20. Inflation registered a rate of 1.34%, decelerating when compared to the rate registered during 1Q20. Finally, during the second quarter of 2020, the average $/€ exchange rate remained constant with respect to 1Q20 at 1.10 $/€.

Macroeconomic overview

  • During the second quarter of the year, the German economy recorded a significant decrease in its year-over-year GDP growth rate of 9.03 p.p. with respect to the previous quarter, down to -11.26%. This behavior was mainly due to the performance of the internal and the external demand.
  • Regarding the external sector, imports of goods and services decreased by 15.40 p.p. in the second quarter of 2020 with respect to 1Q20, down to a rate of -17.41%. Furthermore, exports fell by 18.33 p.p., down to -22.18% in 2Q20.
  • Regarding the labor market, the unemployment rate accelerated with respect to the previous quarter reaching a rate of 4.17%, and the year-over-year growth rate of employment slowed by 1.55 p.p. when compared to the first quarter of 2020, down to -1.25%.
  • The euro remained constant against the dollar when compared to 1Q20, standing at 1.10 $/€ in 2Q20.
  • The inflation rate stood at 1.34% during the second quarter of 2020, following a deceleration of 0.30 p.p. when compared to the previous quarter.

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© GMS Management Solutions, S.L., 2020. All rights reserved. The information contained on this publication is of a general nature and does not constitute a professional opinion or an advisory service. The data used in this publication come from public sources. GMS Management Solutions, SL assumes no liability for the veracity or accuracy of such data.