Sunday 23 May 2021
Compensation can “take years”
Corona costs Germany almost 300 billion
The pandemic is leaving a clear mark on the German economy: According to the Institute for the German Economy, the corona crisis is costing the Federal Republic around 300 billion euros. A quick recovery is unlikely to be in sight, predicts the IW.
According to calculations by the Institut der Deutschen Wirtschaft (IW), the corona crisis cost Germany almost 300 billion euros in prosperity. It will “take years before the losses and structural distortions are balanced,” said IW boss Michael Hüther of “Welt am Sonntag”, which quoted from the institute’s calculations. Accordingly, the economy would have “grown significantly” without Corona.
For its calculations, the IW compared the actual and forecast growth with the so-called potential growth of the gross domestic product (GDP). This shows how strong the German economy would have grown in the past six quarters without the pandemic. Accordingly, the past three quarters alone account for almost 140 billion euros in lost growth.
Almost a third of this loss of added value can therefore be attributed to the renewed lockdown as a result of the second wave, which is only now being relaxed because of the progress in vaccination and the falling incidences, the newspaper reported on the IW calculations. “The vaccination rate is finally increasing, that is a signal to the economy that should not be underestimated,” said Hüther. “Nevertheless, we must not succumb to the illusion that the crisis will no longer leave its mark.”
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