Germany faces approximately 300 billion euros in financial losses due to the coronavirus pandemic.
The German economy has suffered a significant blow due to the COVID-19 pandemic, with a total loss of nearly 440 billion euros in prosperity according to recent estimates. This figure represents a substantial increase from the previously mentioned 300 billion euros in losses.
To determine the extent of this impact, the Cologne Institute of the German Economy (IW) compared the actual and forecast growth with the so-called potential growth. Without the pandemic, the German economy would have grown significantly more than it has, the IW concluded.
The renewed lockdown due to the second wave caused a significant portion of these losses, with around a third being attributed to this period. The remaining loss of approximately 140 billion euros in value creation is for the past three quarters (Q4 2020 to Q2 2021).
On a positive note, the pace of vaccination is accelerating, according to IW chief Michael Hüther. He stated that the vaccination progress is a not-to-be-underestimated signal to the economy. The easing of the lockdown due to vaccination progress and falling incidence rates is currently underway, offering a glimmer of hope for a recovery.
However, the IW forecasts that the German economy will take years to make up for the losses and structural distortions caused by the crisis. The organization did not specify who made the initial estimate of the economic impact of the pandemic.
In conclusion, the COVID-19 pandemic has dealt a heavy blow to the German economy, with the losses amounting to a staggering 440 billion euros. While the pace of vaccination is increasing and the easing of the lockdown is underway, the road to recovery is expected to be long and challenging.
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