One of Germany's leading economic think tanks said the economy had already contracted by 1.9% in this year's first quarter. All economic sectors had been impacted, especially the travel and hospitality industries.
Germany's economy is not expected to recover from the effects of the coronavirus crisis until the end of 2021, the Institute for Economic Research (Ifo), a Munich-based economic think tank, said on Tuesday.
Ifo has predicted that the German economy, Europe's largest, will contract by 6.6% overall in 2020. The think tank said it had already diminished by 1.9% in the first quarter of 2020 and is expecting a 12.2% contraction in the three months that follow.
Several of Germany's economic sectors have been seriously impacted by the effects of COVID-19 mitigating measures. Travel agencies and tour operators reported the biggest slump, followed by the aviation and the hotel and restaurant industries.
But the arts and entertainment sector and vehicle manufacturing have also been affected. The only industry that has seen a boost has been the pharmaceutical sector. This has been reflected by a recent jump in shares of Bayer, which contributed to a general upbeat opening European markets on Monday.
Ifo predicted that all sectors of the economy could see a boost, as lockdowns are gradually eased, from the third quarter and beyond.