Economic Impact of the Second Coronavirus Wave on Selected Sectors of the Economy

The second wave of coronavirus will suppress the German economy in the 2020/2021 winter half-year. However, the macroeconomic impact will be significantly less than during the first wave in spring 2020. The latest results of the ifo Business Surveys indicate that economic output is likely to decline only in consumer-related service sectors, where social contact is an important part of the business model. Taken together, the affected sectors will drag down the rate of change in GDP by around half a percentage point in the fourth quarter of 2020 and by just under another percentage point in the first quarter of 2021. This assumes that the changes in behavior and the policy measures associated with the wave of infection remain unchanged up to and including March. Compared with gross value added in the fourth quarter of 2019, the last pre-crisis quarter, real economic output in the affected sectors is therefore likely to be around EUR 20 billion lower in the first quarter of 2021. This means a loss in value added of EUR 1.5 billion per week. Overall, however, GDP is expected to stagnate rather than decline at the start of the year, given that the manufacturing and construction sectors continue to perform well.