Germany’s PMI fell to a six-month low in January (from 92.2 to 90.1 points) as the second wave of COVID-19 halted recovery in Europe’s main economy, Reuters writes.
German business is losing optimism. “The first quarter remains difficult for the country, the losses in the service sector are too great,” said VP Bank economist Thomas Gitsel. Germany has extended quarantine restrictions, some of which will remain in effect until mid-February. Earlier, several of the federal states of Germany most affected by the coronavirus epidemic demanded that the government extend the lockdown.
Last year, Germany’s GDP fell by five percent, and is expected to grow by three percent in 2021. However, the German economy could suffer a “serious setback” if the authorities decide to extend the tough restrictive measures due to COVID-19 for a few more months, according to the report of the country’s central bank.
The Central Bank also clarified that in the last three months of 2020, the German economy showed zero growth, as the downturn in the hotel business and retail trade was offset by a rebound in industry and construction.