Status: 11/27/2021 4:32 p.m.
Rising numbers of infections, possible new lockdowns and clouded consumer sentiment: the German economy looks to the winter half-year with concern. However, the analysts do not expect the economy to crash.
According to economists at leading financial and economic institutes, the German economy is facing a hard winter. “After the summer economic boom, it should be enough for mini-growth at the turn of the year,” said Katharina Utermöhl from the Allianz Group in a survey by the dpa news agency.
Marc Schattenberg from Deutsche Bank even expects zero growth over the coming months. “I expect economic growth to stagnate in the winter months,” he said. In the eurozone, Germany is now at the bottom of the list in terms of economic growth. Utermöhl is forecasting only 2.7 percent growth for the Federal Republic of Germany this year. In the euro zone, growth is estimated at around five percent.
The escalating infection situation is a cause for concern
The background to this is the consumer mood, which has collapsed due to the escalating corona infection situation. The structural problems of the industry have long been compensated for by a boom in private consumption – among other things because of the catch-up effects after the lockdowns: “We are seeing that consumption is also deteriorating again in the service sector,” said Veronika Grimm, member of the Advisory Council of ” Economy “of the federal government. However, it restricted: “The effect on the economy will remain limited.”
The economic sectors mainly affected, such as culture, tourism and gastronomy, are sectors that have only a small share in gross value added. Nevertheless, Fritzi Köhler-Geib, the chief economist of the state-owned banking group KfW, admits that the signs are not pointing upwards. “In view of these setbacks, all economic analysts have revised their forecasts for the current year significantly downwards,” she said.
No economic crash feared
With a lull in consumption, the ongoing supply bottlenecks in industry and the continued high energy costs, the German economy is “under pressure on all fronts,” said Allianz expert Utermöhl. However, the economy has also learned to deal with the circumstances, restrictive measures are likely to be more targeted this time than a year ago. “On the whole, however, we expect the growth losses to be less than in previous waves. We therefore do not expect an economic crash.”
Grimm also emphasized that as long as the vaccinated could participate in public life, the consumption brake would not be too strong. However, there could be a significant slowdown in the recovery processes on the labor market.
There could be significantly more short-time working again
The companies have now learned to deal with the instrument of short-time work, as Schattenberg explained. “We are also counting on significantly more short-time work again,” said Utermöhl. Especially then, should there be a further lockdown, for example in some areas of retail or gastronomy.
In their opinion, the state corona aid should be extended until spring. The acting Federal Labor Minister Hubertus Heil (SPD) also expects an increase in short-time work and additional burdens on the state budget in the fourth wave of corona. “Due to supply chain disruptions in the industry and sales collapse due to regional lockdowns, we expect a slight increase in short-time working this winter and additional costs of 400 million euros,” said Heil of “Bild am Sonntag”.
KfW chief economist Köhler-Geib pointed out that the uncertainties of the pandemic on the labor market are meeting with a blatant shortage of skilled workers. “In the industry since reunification, never before have so many companies been affected by a shortage of skilled workers. This shows that the shortage of skilled workers is growing into a problem that business and politics urgently need to deal with more,” she emphasized.
The event industry expects devastating consequences
The Federal Association of the Concert and Event Industry fears serious consequences for its industry. Experts had already predicted the expected increase in corona incidences in the middle of the year. “The fact that these warnings did not induce the previous government to take the necessary measures now unfortunately also has devastating consequences for the event industry,” said association president Jens Michow. Now numerous events would be canceled again, with the result that the organizers would incur significant losses and additional costs.
“In any case, many people are afraid of going to concerts for reasons of infection. Hardly anyone would like to experience two or three-hour concerts with a mask or to sit apart from their family due to distance rules.” All of this has had a significant impact on ticket sales for months. “Insofar as the submission of negative test results is now also required for 2G, the majority of visitors no longer take part.”