BERLIN, March 20 (Xinhua) -- Germany's GDP would decrease temporarily by six percent due to the spread of the coronavirus pandemic, the Institute for Employment Research (IAB) announced on Friday.
The calculations made by IAB were based on the assumption that part of the economic activity would be interrupted for six weeks and then return to normal levels over an equally long period. The scenario assumed a global recession that would not grow into a systemic crisis.
Over the course of 2020, IAB is expecting a decline of German GDP of two percent. In the case of more serious interruptions of the economy, GDP in Germany would even decline by 4.7 percent in 2020.
IAB noted that the scenarios had not assumed a systemic global economic crisis or "prolonged widespread absences from work" but warned that Germany would face a "severe recession" nonetheless.
Despite the restrictions, Germany's labor market could still remain "relatively robust" if the coronavirus spread only resulted in a "temporary effect in economic activity", said Enzo Weber, head of Forecasts and Macroeconomic Analyses at IAB.
According to the IAB forecast, the number of people in employment in Germany would stagnate at an annual average of 45.25 million in 2020, but would temporarily fall by around 300,000.
In the second scenario with a longer period during which Germans could not go to work, "the number of unemployed could temporarily exceed the 3 million mark", Weber warned. In 2019, only 2.27 million people had been unemployed in Germany. Enditem
