The coronavirus launched in 189.2 billion euros in 2020 deficit of the German public sector and is the first deficit since 2013 and the largest budget deficit since the reunification of Germany three decades ago, the German Statistical Office announced.
The pandemic, which has so far claimed the lives of more than 77,000 people in Germany, has dealt a severe blow to Europe ‘s largest economy, which however has proven to be more resilient than many expected, in part because there is still strong demand from China for exports.
According to AMPE, public spending increased by 12.1% to 1.7 trillion euros in 2020, as the government removed all “brakes” on spending to offset the impact of months-long lockdown measures. while tax revenues fell 3.5% to 1.5 trillion euros, the Statistical Service announced today.
Expenditure growth is expected to continue. German Finance Minister Olaf Solz promised last month that he would do whatever it took to enable Germany, by increasing spending, to emerge from the economic downturn caused by coronavirus.
Germany is trying to control a third wave of the pandemic and will keep many businesses, such as bars and cinemas, closed, at least until later this month.
However, the number of people working fewer hours per week fell last month thanks to the industrial sector, which benefits from export strength, announced today the Ifo Institute.
Companies can reduce working hours as part of a government plan aimed at avoiding mass redundancies during the crisis by offering companies subsidies to keep employees on payroll.