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German government: Economy will shrink 5.5% this year, expand 4.4% in 2021

German Economy Minister Peter Altmaier holds a news conference to present the government's economic autumn projection, amid the coronavirus disease (COVID-19) outbreak, in Berlin, Germany October 30, 2020. REUTERS/Michele Tantussi/Pool

BERLIN (Reuters) - Europe’s largest economy will likely shrink by 5.5% this year, the German Economy Ministry said on Friday, revising its previous forecast for a 5.8% contraction, before expanding by 4.4% in 2021.

The German economy has taken a thrashing from the coronavirus pandemic this year and a circuit-breaker lockdown is due to come into effect nationwide on Monday in a bid to curb a surge in infections.

The ministry’s new 2020 forecast would still mean Germany is in one of the worst recessions of the post-World War Two era this year but means it is not faring as badly as during the 2009 global financial crisis.

The forecasts confirm what Reuters reported from a source on Monday.

Reporting by Christian Kraemer; Writing by Michelle Adair; Editing by Paul Carrel

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