Dresden: Ifo Institut: the East German economy in the Corona-recession

The Corona-crisis has led to the evaluation of the Dresden Ifo Institute, in the first half of a massive economic downturn in Eastern Germany. Accordingly, the

Dresden: Ifo Institut: the East German economy in the Corona-recession

The Corona-crisis has led to the evaluation of the Dresden Ifo Institute, in the first half of a massive economic downturn in Eastern Germany. Accordingly, the gross domestic product decreases in the East, according to the forecast, in this year of 5.9 percent, said the Economist and Deputy Director of the Institute, Joachim Ragnitz on Thursday. In Saxony, the economy could go back to power because of the larger industry share by as much as 6.4 percent. Nationwide, the Ifo Institute, gross domestic product, expects this year with a Minus of 6.7 percent.

The Corona-pandemic and measures to mitigate, which would have plunged the German economy into the "deepest recession of the post-war history," says Ragnitz. Were affected, all regions of Germany. The economy, breaking performance in the East a little less than in the West, has to do, according to the Economists, especially with the structure. The Eastern German economy is, therefore, fragmented and less dominated by large industrial companies.

The industry is counting on, according to the Ifo Institute, one of the most of the Corona-crisis-affected areas. In the latest economic survey, about 27 percent of the farms in Saxony, the Situation is life threatening in East Germany, it was 21.5 per cent. The industry is suffering significant production losses, mainly because of the time disruption of supply chains, said Ragnitz. In addition to the manufacturing sector, especially service providers such as retail and hospitality are affected by the crisis.

The employees get to feel: The economic Institute expects that the number of the employed in the East this year to 80 700 - minus one percent - goes back. Also in the next year the number goes according to the forecast only slightly up (0.3 percent). Although the Instrument of short-time work, so Ragnitz active currently. The question is not whether the work is lost but, at some point.

The Economists expect, however, that with the loosening in the second half of the year, the economy in East Germany is slowly recovering again. The pre-crisis level will be reached according to the Ifo Institute, but most likely not until the end of 2021 and again. The Economists predict for the next year in Saxony, an increase in the gross domestic product to 6.3 percent, in the whole of the East of 5.8 percent.

dpa
Updated Date: 09 July 2020, 09:27

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