For the first time, the Federal Statistical Office has published a quick estimate of the development of the gross domestic product in Germany within only 30 days of the end of the quarter. Previously, 45 days were usual. And this premiere starts right away with a historic result. Compared to the previous quarter, economic output declined by 10.1 percent after price, seasonal and calendar adjustments. The gap to the same quarter of the previous year is even more than 11 percent. It has never been so bad. The fact that first-quarter earnings were revised upwards slightly is hardly significant.
The lockdown due to the corona pandemic from mid-March to May has put many sectors in a deep sleep and sent the economy into a rapid downward spiral. According to the German Federal Statistical Office, almost all demand components slipped into the red without any further details being given. Private consumer spending and investment in equipment slumped significantly, as did exports and imports of goods and services. Only the state increased its expenditure during the crisis period.
No wonder that the negative shock also made itself felt on the labor market despite the intensive use of short-time work. According to preliminary calculations, there were an average of around 44.7 million people working in Germany in the second quarter of 2020. Compared to the previous quarter, the number of employed persons fell by 618,000 or 1.4 percent in seasonally adjusted terms. Short-time workers are counted as employees according to the concepts of the employment calculation and the labour force survey.
However, the economic low point should be passed in the second quarter. In the coming quarters, we expect a recovery that will be quite strong in some areas, provided that a renewed lockdown can be prevented in view of rising infection figures. However, the recovery will not be strong enough to compensate for the losses suffered. For the year as a whole, gross domestic product will remain down by just under 6 percent. This is greater than the decline during the 2008/2009 financial crisis.