German Economy Beats Expectations to Record 8.2%

German Economy Beats Expectations to Record 8.2%

The German economy rebounded as new gross domestic product  (GDP) figures show that the economy is recovering, revising its growth forecast upwards for the year after being hit hard by the pandemic.

According to figures released by the Federal Statistical Office on Friday, GDP grew by a record 8.2% in Q3 of 2020 compared to the second quarter’s unprecedented 10% drop.

Economy Minister Peter Altmaier said that growth figures were ‘well above expectations’ of 6.6%, adding that the German economy is able to ‘unleash the forces of growth’ even under the pandemic.

The recession was due to stringent restrictions related to the coronavirus that have shut down businesses and services across the country, significantly effecting economic activity.

The statistics office said the bigger-than-expected recovery was driven by stronger export activity, more private consumption, and increased investment in machinery, as well as strong demand from China in recent months.

The improvement comes ahead of the re-application of precautionary measures in Germany, which began on Monday to curb the virus, which reached 18,000 cases today.

With the new restriction in place, which includes the closure of restaurants and bars, growth of only 0.4% is expected for Q4, and a full recovery by 2022.

Meantime, The German government has set a plan to compensate companies affected by the lockdown by paying up to 75% of their sales since November 2019, after being able to allocate €10 billion for this aid package.