Coronavirus Pandemic Caused EUR 330 Billion in Economic Losses for Germany
In Germany, the costs of the coronavirus crisis for the years 2020 and 2021 amount to EUR 330 billion. “This corresponds to a loss of 10 percent of 2019’s overall economic output,” says Timo Wollmershäuser, Head of Forecasts at ifo, who calculated the figures. Future losses in value added, for example due to shortfalls in education, are not yet reflected in these ifo figures. “We based our calculation on the ifo Institute’s December 2019 economic forecast for 2020 and 2021. If the crisis hadn’t happened, the German economy would have grown by 1.3 percent in each of those years.”
At the time, the ifo forecast was in line with forecasts by other research institutes and the Deutsche Bundesbank. “This is the most severe global economic crisis since the Great Depression of the 1930s,” says ifo President Clemens Fuest, “so the German government was right to take decisive action to stabilize the economy. It did not do so through a traditional demand-driven stimulus policy, but instead by stabilizing the financial markets and providing bridging aid to employees, the self-employed, and businesses.” The consequences of the crisis are now higher public debt, poorer education levels, and a surge in digitalization that is changing the economy through working from home and online retailing.
It was almost exactly two years ago that Covid-19 arrived in Europe. Germany’s economic output slumped by 4.6 percent in 2020, before growing by 2.7 percent in 2021. “Nevertheless, overall economic performance fell noticeably short of its potential,” Wollmershäuser says.
