Gross domestic product: detailed results on the economic performance in the 2nd quarter of 2020 (2024)

Press release No. 323 of 25 August 2020

Gross domestic product. 2^ndquarter of 2020
-9.7% on the previous quarter (price, seasonally and calendar-adjusted)
-11.3% on the same quarter a year earlier (price-adjusted)
-11.3% on the same quarter a year earlier (price and calendar-adjusted)

WIESBADEN – The gross domestic product (GDP) fell sharply by 9.7% in the 2^nd quarter of 2020 on the 1st quarter of 2020 after adjustment for price, seasonal and calendar variations. According to the Federal Statistical Office (Destatis), the GDP drop in the 2^nd quarter of 2020 was not quite as steep as reported in the first release of 30 July 2020 (-10.1%). The slump in the German economy was thus much larger than during the financial and economic crisis of 2008/2009 (-4.7% in the 1^st quarter of 2009) and the sharpest decline since quarterly GDP calculations for Germany started in 1970.

Massive drop in domestic and foreign demand
As a consequence of the ongoing corona pandemic and the restrictions related with it, household final consumption expenditure fell sharply by 10.9% in the 2^nd quarter of 2020 compared with the 1st quarter after price, seasonal and calendar adjustment. Gross fixed capital formation in machinery and equipment even dropped by as much as 19.6%. Gross fixed capital formation in construction also declined markedly (-4.2%) in the 2^nd quarter, which was due in particular to the exceptionally strong 1st quarter (+5.1%). Only final consumption expenditure of general government had a stabilising effect; it was 1.5% higher than in the previous quarter and prevented an even larger GDP decrease.

The trade with foreign countries also slumped. In the 2^nd quarter of 2020, exports of goods and services dropped by 20.3% on the 1^st quarter 2020 after price, seasonal and calendar adjustment. Imports also recorded a double-digit decline of 16.0%. This means that the decreases were even markedly larger than during the financial and economic crisis in the 1^st quarter 2009 (exports: -11.0%; imports: -5.9%). In the 1st quarter of 2020, at the beginning of the coronavirus crisis, exports had already dropped by 3.3% and imports by 1.9%.

Gross domestic product slumps also year on year

The German economy shrank also in a year-on-year comparison. GDP was down a price-adjusted 11.3% in the 2^nd quarter of 2020 (also calendar-adjusted) on a year earlier. Again, such large decreases had not been observed even during the financial and economic crisis of 2008/2009. The largest decrease on the same quarter of the preceding year had been recorded in the 2^nd quarter of 2009 (-7.9%).

Domestic and foreign demand significantly down on a year earlier

Domestic demand slumped also year on year. Gross fixed capital formation in machinery and equipment fell sharply by 27.9% after already dropped considerably by 9.5% in the 1st quarter. Household final consumption expenditure recorded a price-adjusted double-digit decline of 13.0% on a year earlier. In contrast, an additional 3.8% in government final consumption expenditure prevented the economy from crashing even more. Gross fixed capital formation in construction, which was 1.4% higher than in the 2^nd quarter of 2019, also had a supporting effect year on year.

Foreign trade fell dramatically also compared with a year earlier. Exports of goods and services fell by 22.2% (price-adjusted) in the 2^nd quarter of 2020 year on year. Imports did not drop as strongly (-17.3%) over that period.

Gross value added down except for construction

On the production side of the GDP, price-adjusted gross value added was lower in almost all economic sectors in the 2^nd quarter of 2020 than in the 2^nd quarter of 2019. The largest decline was recorded for manufacturing with a 20.8% drop in gross value added. There had been larger declines only during the financial and economic crisis of 2008/2009 (-25.0% in the 2^nd quarter of 2009). In contrast to that crisis, however, this time other economic sectors are affected by massive declines, too. The economic performance of the business services sector was down by 16.0% and that of trade, accommodaion and food services, transport by 12.9%. Only the construction industry showed a year-on-year increase of the price-adjusted gross value added by 1.6% in the 2^nd quarter of 2020.

Strongest decline in employment since German reunification

The economic performance in the 2^nd quarter of 2020 was achieved by roughly 44.7 million persons in employment whose place of employment was in Germany. This was a decrease of 574,000, or 1.3%, on a year earlier (see press release 312/20 of 18 August 2020). The last decline in the number of persons in employment was recorded during the financial and economic crisis in the 1^st quarter of 2010. Hence, the coronavirus crisis started affecting the labour market, too, in the 2^nd quarter 2020. It must be noted, however, that short-time work does not affect the employment figures because short-time workers still count as persons in employment.

Household savings ratio nearly doubled
At current prices, the gross domestic product fell by 8.9% and the gross national income by 8.3% in the 2^nd quarter of 2020 compared with a year earlier. The decline in the net national income at factor costs was slightly less pronounced (-7.3%). According to first provisional calculations, the compensation of employees was down by just 3.6% year on year, while property and entrepreneurial income fell sharply by 17.6% because of the production restrictions. Gross wages and salaries of employees decreased by 4.8% from the 2^nd quarter of 2019, net wages and salaries by 4.3%. When calculated as an average per employee, wages and salaries declined less markedly (-3.9% in gross terms, -3.4% in net terms). Owing to government aids like short-time allowance, the disposable income of households was just 0.8% lower in the 2^nd quarter 2020 than a year earlier. Household final consumpadjustedtion expenditure at current prices, however, showed a two-digit decrease of 11.7%. The relatively stable incomes, on the one hand, and consumer reticence, on the other, resulted in a substantial rise in household saving. According to provisional calculations, the savings ratio nearly doubled to 20.1% in the 2^nd quarter of 2020 year on year (2^nd quarter 2019: 10.2%).

Revision of previous results and methodological notes

Starting with the 2^nd quarter of 2020, the Federal Statistical Office released the GDP for the first time as early as 30 days after the end of the quarter, that is, about two weeks earlier than before. The earlier availability of the results, however, requires a higher proportion of estimations. In addition, the greater uncertainties caused by the coronav pandemic may lead to larger revisions than usual. Apart from calculating the detailed results for the 2^nd quarter of 2020, the Federal Statistical Office also revised the gross domestic product figures. Taking into account the statistical information that became available after the first release of 30 July 2020, this resulted in an upwards revision of the gross domestic product by 0.4 percentage points.

Crisis Monitor enables comparison between corona crisis and financial/economic crisis
The gross domestic product also forms part of the “Crisis Monitor“ (www.destatis.de/krisenmonitor), by means of which the Federal Statistical Office compares the development of major short-term indicators in the corona crisis and the financial and economic crisis of 2008/2009. The Crisis Monitor complements the „Corona statistics“ (www.destatis.de/corona), which has provided statistical information on the economic and social consequences of the corona pandemic since early April.

More information
More information on the quality of the GDP early estimate and on why the Federal Statistical Office for the first time released the more rapid calculation of the GDP just now during the coronavirus pandemic is given in our podcast at www.destatis.de --> Themen --> Wirtschaft --> Volkswirtschaftliche-Gesamtrechnungen-Inlandsprodukt --> Aktuelles. For an English-language text version please go to www.destatis.de --> Themes --> Economy --> National accounts, domestic product --> Current news.

Destatis website offers comparison between corona crisis and financial/economic crisis

More detailed results have been published in Fachserie 18 “National Accounts“, Series 1.2 “Quarterly results“ and Series 1.3„Seasonally adjusted quarterly results using X13“.

Visualised updated results are also available in our interactive national accounts dashboard (only in german).

The above and other current national accounting results are available in the GENESIS-Online database. (81000)