Partial lockdown puts economy under pressure

On Wednesday, under the impression of the rapidly increasing number of new corona infections, the Federal Government and Minister Presidents decided to impose a „partial lockdown“ from November 2. Restaurants and several service industries will have to close again for another four weeks, but this time stores will be allowed to remain open – subject to conditions. Schools and daycare centers will also remain open.

For many businesses in the catering industry, this is of course the „worst case scenario“, even if generous compensation payments have been promised. Hard weeks are also dawning for the retail trade. Although there is hope that the Christmas business will not be completely lost. But the difficult circumstances are likely to deter many customers from their usual shopping spree and shift even more sales to online retailers. The desired effect of the reduction in VAT will therefore only benefit the stationary retail sector to a very limited extent.

The extent to which the industry will be affected will depend not least on the extent to which the economies of the company’s key retail partners also collapse in the current quarter. The partial lockdown will in any case have noticeable implications for the economy as a whole, even if the downturn will probably not be as severe as in the spring. Following the strong recovery in the third quarter, a relapse into a recession – albeit probably a slight one – is now not unlikely. And the further course of the economy in the coming year will largely depend on the successful development and distribution of a corona vaccine.

 

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