BERLIN (Dow Jones) – The Germans will lose hundreds of billions of euros in income as a result of the corona pandemic. This has been calculated by the Institute for the World Economy (IfW) for the news magazine Der Spiegel.
According to the research institute’s forecasts, gross domestic product will shrink by 6.8 percent this year. This means that national income will decrease by 110 billion euros compared to 2019 despite huge subsidies and bridging aids. Every citizen from infants to the elderly would have less on average 1,325 euros.
The actual corona effect is even higher. Because without the pandemic, the economy would not have stagnated, but would probably have grown. “The economy is expected to grow strongly again next year,” said IfW President Gabriel Felbermayr to Spiegel. But that does not mean “that we will get back to the pre-crisis level”. Income of around 390 billion euros will be lost by the end of next year compared to the development expected without corona, even if the economy grows by 6 percent in 2021.
Three quarters of Germans also expect inequality in the country to increase as a result of the pandemic. This was the result of a survey by the polling institute Civey for the mirror. According to this, there is not only an abstract fear of inequality: a third of Germans expect loss of income and wealth this year, a total of 36 percent expect this for the next three years. More than half of the self-employed are preparing for lower incomes this year, almost 50 percent of the workers. If you evaluate the survey results by age, the 30- to 40-year-olds feel financially hit the hardest. It is often about families with children who had difficulty coping with work and family at the same time during the months when the contacts were blocked.
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(END) Dow Jones Newswires
July 03, 2020 08:19 ET (12:19 GMT)