Germany slips into recession as coronavirus hits — its sharpest decline since the global financial crisis

The economy's decline reflects its biggest quarterly drop since the global financial crisis and its second largest fall since German unification.
Germany is the latest country in Europe to enter recession during the coronavirus pandemic. Recently, the UK posted a first-quarter contraction of 2.2%. France and Spain shrank by 5.8% and 5.2%, respectively. The eurozone economy fell by its "sharpest on record" at 3.8%.
Visit Business Insider's homepage for more stories .

Germany plunged into recession at the start of 2020, with Europe's biggest economy shrinking 2.2% in the first three months of the year, according to data released Friday by the German statistics authority.

"The corona pandemic hits the German economy hard. Although the spread of the coronavirus did not have a major effect on the economic performance in January and February, the impact of the pandemic is serious for the 1st quarter of 2020," Destatis, the country's data authority, said in its statement.

The German economy's decline reflects its biggest quarterly drop since the global financial and economic crash of 2009 and the second-largest decrease since German unification.

Screenshot 2020 05 15 at 13.03.01 Destatis

Other countries in the European region have also recently reported horrific economic data. The UK's economy dropped 2% in the first quarter of the year. France and Spain shrank by 5.8 and 5.2% respectively. The eurozone economy, as a whole, contracted by 3.8% in the same period.

"The first quarter QoQ contraction of 3.8% is the sharpest on record," said Artur Baluszynski, head of research at Henderson Rowe.

"However, Germany only contracted by 2.2% and considering that France and Italy contracted by almost twice that much, we should expect to see some friction to arise when it comes to future contributions to any EU recovery structures."

Data showed Germany's household expenditures dropped sharply in the first three months of the year, while exports and imports saw strong declines in the fourth quarter of 2019.

However, general government spending and expenditures related to the construction industry had a "stabilizing" effect and prevented a potentially larger gross domestic product decrease, Destatis said.

Any economic performance achieved in the first quarter was largely in part due to 45 million people still employed in the region. This number is an increase of only 147,000 people, or 0.3%, compared to a year ago.

"The corona pandemic thus had only a moderate impact on the number of persons in employment in the 1st quarter of 2020, one of the reasons being that short-time workers are counted as persons in employment," the statistics authority said.

According to latest figures, Germany has 174,975 confirmed coronavirus cases and 7,928 fatalities.

NOW WATCH: A cleaning expert reveals her 3-step method for cleaning your entire home quickly

Germany slips into recession as coronavirus hits — its sharpest decline since the global financial crisis

JOIN OUR PULSE COMMUNITY!