Timo Wollmershäuser, Ifo Institute. (picture alliance / dpa)
The German economy will be able to cope with the consequences of the coronavirus pandemic, the Munich-based Ifo economic research institute predicted on Wednesday.
While the crisis would lead to a serious recession, Germany was well equipped to weather the storm, Ifo economy head Timo Wollmershaeuser said.
Germany had the preconditions in place to regain the economic level prevailing before the crisis over the medium term, Wollmershaeuser said.
The country's sound financial position allowed the state to take far-reaching measures to cushion the negative fallout for business and households, he said.
Germany's leading forecasting institutes are predicting that output will fall by 4.2 per cent this year in the sharpest such decline in the more than 10 years since the financial crisis broke.
But they are also predicting a rapid recovery and growth of 5.8 per cent next year.
Economy Minister Peter Altmaier described the forecast as encouraging but noted that a rapid recovery depended on the economy in Europe and globally.
The institutes also noted increased risks, if the pandemic was drawn out.
Wollmershaeuser added that everything had to be done to prevent a second EU debt crisis.
According to the report, there will be a major impact on German employment, with the number on short-time working rising to 2.4 million and the overall unemployment rate increasing to 5.9 per cent in the short term.
But the institutes are not predicting widespread bankruptcies. The government's support package was having its intended effect, Wollmershaeuser said.
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