IMF gives Germany good marks. According to an analysis by the International Monetary Fund, Germany reacted quite well to the corona pandemic. The country is therefore doing very well economically – but aid should not be reduced too early.
IMF gives Germany good marks
The International Monetary Fund (IMF) gives Germany good marks in the fight against the coronavirus crisis. The IMF announced that early and energetic action was taken both in the health system and in aid for the economy. As a result, Germany is doing better than other countries in Europe. “Overall, the German economy will shrink by around five and a half percent in 2020,” estimates the IMF. That would still be one of the worst recessions in the post-war period. But next year there will be a recovery. The pre-crisis level is unlikely to be reached again until 2022 at the earliest.
Most recently, the IMF Germany had predicted a decline in gross domestic product of six percent for this year, with growth of 4.2 percent in 2021. The improved forecast could change slightly again, the Monetary Fund restricts. If a second wave of infections cannot be brought under control, there is a risk of a longer shutdown than previously planned. There would also be risks in a hard Brexit and new trade disputes. The IMF regularly analyzes the economic policies of numerous countries and makes recommendations. The fund advises Germany to continue its loose financial policy due to the corona crisis until there is evidence of a sustainable recovery.
Federal Finance Minister Olaf Scholz has emphasized several times that he does not want to change financial policy too soon. So far, he has calculated new debt of a good 96 billion euros for 2021 – the second highest ever. To do this, he must once again make use of the exemption from the debt brake anchored in the Basic Law.