BERLIN (dpa-AFX) - Germany's economy is set to grow at a sharp rate in the third quarter, after a record fall in the second quarter due to the impact of the coronavirus containment measures, but activity levels are likely to remain well below the pre-crisis level for some time more, Bundesbank said in its monthly report on Monday.
The economic recovery that began back in May after the first easing of containment measures is expected to continue in the summer months, the bank said citing its experts.
This recovery is being underpinned by the expansionary monetary and fiscal policy measures, such as the economic stimulus package recently adopted by the Federal Government.
Gross domestic product decreased 10.1 percent quarter-on-quarter during the three months to June. This was the biggest fall since the quarterly series began in 1970, data from Destatis showed.
Private consumption likely had a massive drop in the second quarter due to temporary contact restrictions and uncertainties especially in the hotel and restaurant sector. Car purchases were also less and there was a dramatic decline in expenditure on travel and other recreational activities.
Real retail sales especially sales of food beverages, and online and mail order business thrived during the Covid-19 crisis.
While there were sharp decline in employment and rapid growth in joblessness, mainly due to massive reductions in working hours,'... measured against the depth of the economic slump, these adjustments were fairly modest,' Bundesbank said.
Widespread take-up of short-time work schemes had stabilized both employment levels and incomes, the bank pointed out.
Copyright RTT News/dpa-AFX