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Macroeconomic outlook report: Germany

First quarter of 2020

During 1Q20, Germany´s GDP registered a sharp contraction in its y/y growth rate, which stood at -2.30%. This decrease was mainly due to the performance of the internal and external sector, both heavily burdened by the containment measures carried out by the German government to contain the spread of the Covid-19 virus. The German labor market recorded an increase in the unemployment rate with respect to the previous quarter, registering a rate of 3.37%. On the other hand, the y/y growth rate of employment decreased from 0.57% in 4Q19 to 0.31% in 1Q20. Inflation registered a rate of 1.64%, accelerating when compared to the rate registered during 4Q19. Finally, during the first quarter of 2020, the average $/€ exchange rate decreased with respect to 4Q19, down to 1.10 $/€.

Macroeconomic overview

  • During the first quarter of the year, the German economy recorded a notable contraction in its year-over-year GDP growth rate of 2.69 p.p. with respect to the previous quarter, down to -2.30%. 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 2.96 p.p. in the first quarter of 2020 with respect to 4Q19, down to a rate of -2.11%. Furthermore, exports fell by 4.81 p.p., down to -3.90% in 1Q20.
  • Regarding the labor market, the unemployment rate accelerated with respect to the previous quarter reaching a rate of 3.37%, and the year-over-year growth rate of employment slowed by 0.26 p.p. when compared to the fourth quarter of 2020, to 0.31%.
  • The nominal euro/dollar exchange rate decreased when compared to 4Q19, down to 1.10 $/€ in 1Q20.
  • Inflation stood at 1.64% during the first quarter of 2020, following an acceleration of 0.40 p.p. when compared to the previous quarter.

For more information, click here to access the executive document in pdf.

© 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.