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Danger of recession in Germany decreases – Omikron remains a risk

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Danger of recession in Germany decreases - Omikron remains a risk

Container port Mannheim The economy has so far been confronted with significantly less serious disruptions in the international supply chains than in previous waves of infection. (Photo: imago images/Arnulf Hettrich) Berlin The risk of recession for the German economy fell at the beginning of the year. This is signaled by the economic indicator of the union-related Institute for Macroeconomics and Business Cycle Research (IMK), which was available to Reuters in advance on Friday. The Institute’s early warning system, which is based on currently available economic data, shows a recession probability of 38.6 percent for January to the end of March – after 45.2 percent in December. It is now well below the 50 percent threshold, which according to the IMK signals a continuation of the moderate upswing. However, the rapid spread of the highly contagious corona virus mutant Omicron remains a risk that is difficult to calculate: “Our early warning system processes the currently available data on the Monthly frequency, but it can hardly keep up with the speed of the current infection development,” says IMK expert Thomas Theobald. Despite the high level of uncertainty, the current data situation raises hopes that the economy will be spared a recession over the winter half-year. Gastronomy, the leisure industry and other person-related services are likely to report a drop in sales again. “However, the share of the total value added is significantly lower than in the manufacturing industry. And that has so far been confronted with significantly less serious disruptions in the international supply chains than in previous waves of infection,” says the IMK economist. Top jobs of the day Find the best jobs now and
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More: Economists survey – German economy grew by 2.7 percent in 2021



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