“German economic output underwent a massive decline in the first quarter of 2020 owing to the COVID-19 pandemic and the measures taken to contain it,” the Bundesbank notes in the current issue of the Monthly Report. Since these measures were still in place in April and substantial restrictions are likely to persist in spite of an easing in some cases, the experts expect economic output in the second quarter to be significantly lower still.
New indicator provides timely picture of macroeconomic situation
A new weekly activity index (WAI) for the German economy has been developed at the Bundesbank to assess the impact of the COVID-19 crisis on the economy from a near-time perspective. The Bundesbank is using this new indicator as an input in its short-term economic analysis.
Households continue to rely on low-risk investments
Persistently low interest rates had various effects on financial investment in Germany in 2019. According to the Bundesbank’s latest Monthly Report, while households generally preferred low-risk and liquid forms of investment, a certain degree of searching for yield was evident among financial corporations.
Wuermeling: Supervisory reforms since the last crisis worth their weight in gold
According to Bundesbank Executive Board member Joachim Wuermeling, the situation is stable. “The current crisis shows that we, as supervisors, have learned the right lessons from the last crisis. Many of the measures, which, in some cases, came under sharp criticism, are now proving to be worth their weight in gold,” according to Mr Wuermeling.