Germany makes upward revise of its 2020 GDP forecast

German Economy Minister, Peter Altmaier presents the government's updated economic outlook for 2020 in Berlin, Germany on September 1, 2020.
Emeh Joy

Germany has revised its 2020 GDP forecast. It now expects that the economic devastation resulting from the COVID-19 pandemic would be less severe than initially feared this year, two sources said to Reuters on Tuesday.

The government, however, expects a weaker rebound for Europe's largest economy next year. It revised the economic forecast upward for 2020 to a decline of 5.8% from a previously expected decline of 6.3%, the two sources said.

Despite the upward revision, this would still be the biggest plunge to the nation's economy since the end of World War II. The German economy had contracted by 5.7% during the world financial crisis.

For 2021, the government also revised downward its initial growth forecast to an expansion of 4.4% from the previous estimate of 5.2%, the two people who spoke on the grounds of anonymity disclosed.

This means that Germany's economic situation will not get back to the pre-pandemic level before 2022.

An economy ministry spokesman had declined to speak on the matter.

Economy Minister, Peter Altmaier will present the updated outlook later today after the economy suffered its worst-ever recorded recession in the first half of the year, Reuters reported.

The updated GDP forecast will form the basis for the estimation of tax revenue, which the finance ministry is expected to update next week and also the 2021 budget, which Finance Minister Olaf Scholz is expected to present some time this month.

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