German economy strongly affected in 2020, the year of the corona pandemic
Press release No. 020 of 14 January 2021
WIESBADEN - According to first calculations of the Federal Statistical Office (Destatis), the price adjusted gross domestic product (GDP) was 5.0% lower in 2020 than in the previous year. After a ten-year growth period, the German economy suffered a deep recession in 2020, the year of the corona, a situation similar to that of the 2008-2009 financial and economic crisis. However, the economic downturn on the whole was less serious in 2020 than in 2009 (-5.7%), according to provisional calculations.
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| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| -5.7 | 4.2 | 3.9 | 0.4 | 0.4 | 2.2 | 1.5 | 2.2 | 2.6 | 1.3 | 0.6 | -5.0 |
In calendar adjusted terms, the GDP declined by 5.3% in 2020, as the number of working days was higher than in 2019.
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| -5.6 | 4.0 | 4.0 | 0.6 | 0.5 | 2.2 | 1.2 | 2.1 | 2.9 | 1.3 | 0.6 | -5.3 |
Industry and service sector hit hard by the corona pandemic - increase only in construction
Almost all economic sectors were markedly affected by the corona pandemic in 2020. Production was in part severely scaled down both in the service sector and in industry.
In industry (excluding construction), which accounts for just over one quarter of the total economy, the price adjusted economic performance declined by 9.7% on 2019, in manufacturing even by 10.4%. Industry was affected by the consequences of the corona pandemic especially in the first half of 2020, for instance, due to temporary interruptions in the global supply chains.
The economic slump was particularly strong in the service sector where decreases were partly as severe as never before. Examples include trade, transport, accommodation and food services where the price adjusted economic performance declined by 6.3% compared with 2019. However, opposite trends were also recorded: online trade increased markedly, while permanent retail trade in part declined substantially. The tight restrictions in accommodation, restaurant and similar services led to an outstanding decline in accommodation and food services.
A sector that could sustain its position in the crisis was construction: price adjusted gross value added even increased by 1.4% year on year.
Massive drop in domestic and foreign demand
The impact of the corona pandemic was marked also on the demand side. In contrast to the financial and economic crisis, when the economy was supported by all components of consumption expenditure, household final consumption expenditure in 2020 fell a price adjusted 6.0% year on year, which was an unprecedented decrease. Government final consumption expenditure saw a price adjusted 3.4% increase and had a stabilising effect even in the corona pandemic. This was, among other things, based on the acquisition of protective equipment and hospital services.
Gross fixed capital formation recorded a price adjusted decline of 3.5%, which was the largest decrease since the financial and economic crisis of 2008/2009. Contrary to this trend, gross fixed capital formation in construction was up 1.5%. Gross fixed capital formation in machinery and equipment decreased a price adjusted 12.5% on the previous year. Gross fixed capital formation in other fixed assets, which include in particular research and development, was down a price adjusted 1.1% according to first estimates.
The corona pandemic also had a massive impact on foreign trade. Exports and imports of goods and services in 2020 decreased for the first time since 2009, that is, exports by a price adjusted 9.9% and imports by 8.6%. The decline was particularly large for imports of services; this was mainly due to the high proportion of tourism, for which a sharp fall was recorded.
Continuous upward trend in labour market ended after 14 years
On an annual average in 2020, the economic performance was achieved by 44.8 million persons in employment whose place of employment was in Germany. That was a decrease of 477,000, or 1.1%, on 2019. Due to the corona pandemic, the upward trend in employment ended, which had lasted for over 14 years, even during the financial and economic crisis of 2008/2009. This affected especially marginally employed people and self-employed, whereas the number of employees subject to social insurance remained stable. Dismissals seem to have been avoided especially by the extended regulations regarding short-time work.
First financial deficit (net borrowing) of general government after 8 years of surpluses
General government budgets recorded a financial deficit (net borrowing) of 158.2 billion euros at the end of 2020, according to provisional calculations. It was the first deficit since 2011 and the second highest deficit since German reunification and was exceeded only by the record deficit in 1995 when the debt of the Treuhand agency were integrated in the general government budget. Central government accounted for the largest share of the financial deficit (98.3 billion euros), followed by state government (26.1 billion euros), social security funds (31.8 billion euros) and local government (2.0 billion euros). Measured as a percentage of nominal GDP, this was a 4.8% deficit ratio of general government for 2020. The European 3% reference value of the Stability and Growth Pact and the target value of the national debt brake were clearly exceeded. However, applying the two targets has been suspended for 2020 and 2021 due to the corona pandemic.
First results regarding the development of the gross domestic product in the fourth quarter of 2020 will be published by the Federal Statistical Office on 29 January 2021. Detailed national accounting results will be released on 24 February 2021.
| 2017 | 2018 | 2019 | 2020 | |
|---|---|---|---|---|
| Change on the previous year in % | ||||
| At current prices | ||||
| Final consumption expenditure of households and NPISHs | 3.0 | 3.0 | 2.9 | -5.4 |
| Government final consumption expenditure | 3.9 | 3.4 | 5.1 | 6.5 |
| Gross fixed capital formation(GFCF) | 4.7 | 6.5 | 5.5 | -2.0 |
| D o m e s t i cu s e s | 4.4 | 3.9 | 3.1 | -3.3 |
| Exports | 6.5 | 3.3 | 1.7 | -10.3 |
| Imports | 8.1 | 5.6 | 2.4 | -10.9 |
| G r o s sd o m e s t i cp r o d u c t(GDP) | 4.0 | 3.0 | 2.8 | -3.5 |
| Gross national income | 3.9 | 3.3 | 2.8 | -3.3 |
| Net national income(factor costs) | 3.9 | 3.0 | 2.2 | -2.5 |
| Compensation of employees | 4.3 | 4.5 | 4.2 | -0.5 |
| Property and entrepreneurial income | 3.0 | -0.5 | -2.7 | -7.5 |
| Disposable income of households | 3.4 | 3.6 | 3.0 | 0.8 |
| Price-adjusted | ||||
| Final consumption expenditure ofhouseholds and NPISHs | 1.5 | 1.5 | 1.6 | -6.0 |
| Government final consumption expenditure | 1.6 | 1.2 | 2.7 | 3.4 |
| Gross fixed capital formation(GFCF) | 2.5 | 3.5 | 2.5 | -3.5 |
| GFCF in construction | 0.8 | 2.6 | 3.8 | 1.5 |
| GFCF in machinery and equipment | 4.2 | 4.4 | 0.5 | -12.5 |
| GFCF in other products | 3.9 | 4.5 | 2.7 | -1.1 |
| D o m e s t i cu s e s | 2.7 | 1.8 | 1.2 | -4.1 |
| Exports | 4.7 | 2.3 | 1.0 | -9.9 |
| Imports | 5.3 | 3.6 | 2.6 | -8.6 |
| G r o s sd o m e s t i cp r o d u c t(GDP) | 2.6 | 1.3 | 0.6 | -5.0 |
| GDP per person in employment | 1.2 | -0.1 | -0.3 | -4.0 |
| GDP per hour worked by persons in employment | 1.7 | 0.0 | 0.0 | -0.2 |
| Gross value added, total | 2.7 | 1.3 | 0.4 | -5.2 |
| including: | ||||
| Manufacturing | 3.5 | 0.7 | -3.5 | -10.4 |
| Contributions to growth of price-adjusted GDP in percentage points | ||||
| Final consumption expenditure ofhouseholds and NPISHs | 0.8 | 0.8 | 0.8 | -3.2 |
| Government final consumption expenditure | 0.3 | 0.2 | 0.5 | 0.7 |
| Gross fixed capital formation(GFCF) | 0.5 | 0.7 | 0.5 | -0.8 |
| GFCF in construction | 0.1 | 0.3 | 0.4 | 0.2 |
| GFCF in machinery and equipment | 0.3 | 0.3 | 0.0 | -0.9 |
| GFCF in other products | 0.1 | 0.2 | 0.1 | 0.0 |
| Changes in inventories, etc. | 0.8 | -0.1 | -0.7 | -0.7 |
| Domestic uses | 2.5 | 1.7 | 1.2 | -3.9 |
| Balance of exports and imports (net exports) | 0.1 | -0.4 | -0.6 | -1.1 |
Visualised national accounts
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. Visualised updated results are also available in our interactive national accounts dashboard (www.destatis.de/vgr-dashboard).
Since 15 December, the „Dashboard Deutschland“ (www.dashboard-deutschland.de) has been online. It has been developed on behalf of the Federal Ministry of the Interior, the Federal Ministry of Finance, and the Federal Ministry for Economic Affairs. The data portal combines up-to-date indicators from official statistics and other data providers. The dashboard already contains over 100 indicators on economic, financial, health and mobility themes, thus giving an overall picture of the current situation in Germany. The range of data also serve as an indicator of the corona pandemic and is going to be extended.
More information
More detailed results are published in Fachserie 18 “National Accounts”, Series 1.1 “First Annual Results”.
Other publications on national accounts and a detailed quality report can be found at Publications.
Visualised updated results are also provided in our interactive national accounts dashboard (available only in German).
The above and other current national accounting results are available in the GENESIS-Online database (81000).
Detailed documents relating to the press conference are available here (only in german).
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