Germany is facing unprecedented challenges as a result of the rapid spread of the coronavirus pandemic, according to the Bundesbank’s latest Monthly Report. The experts regard a slide into a marked recession as being unavoidable. An economic recovery would set in only when the pandemic risk had been effectively brought under control.

The German economy got the third quarter off to a sluggish start. “This was due primarily to export-oriented industry, where the downturn continued,” according to the current issue of the Bundesbank’s Monthly Report.

Sabine Mauderer, Bundesbank Executive Board member and responsible for Markets and Human Resources since the beginning of September, and Yves Mersch, ECB Executive Board member, spoke at the banking and corporate evening at the Regional Office in Munich.

In a joint op-ed piece, Bundesbank Vice-President Claudia Buch, together with her colleagues Sylvie Goulard of Banque de France and Luigi Federico Signorini of Banca d’Italia, call on politicians to seek European solutions in the fight against the COVID-19 pandemic and its consequences. In the Süddeutsche Zeitung, Les Echos and La Repubblica newspapers, they write that other policy areas can learn from European cooperation in the field of financial stability.

The Bundesbank expects the German economy to grow strongly again after a limited setback in the final quarter of 2020 and first quarter of 2021. According to current projections, real gross domestic product could pick up sharply in the following two years and reach its pre-crisis level again in early 2022. This is predicated on the pandemic containment measures being quickly loosened from spring 2021 and ultimately expiring altogether in the early months of 2022.