2020 was a turbulent year for the German economy. In the second quarter, the measures taken in the interest of containing the pandemic brought about a historic slump in economic output across almost all sectors. Gross domestic product fell by 5.0% last year. Following an initial rapid recovery, Germany’s economy is now gradually battling its way out of the crisis.
For the current year, the Federal Government expects a GDP increase of 3.0% (in price-adjusted terms). Gainful employment is likely to stagnate in 2021; the number of registered unemployed is expected to fall slightly. The economy is not likely to regain its pre-crisis level of output before mid-2022. Economic development will continue to be significantly influenced by the course of the pandemic and the measures to contain it.
The Social Market Economy has once again proven its worth during this crisis. Extensive economic assistance was provided to combat the effects of the coronavirus pandemic and the scope of short-time work allowances was expanded, thus protecting millions of jobs and keeping companies afloat by providing much needed support. Moreover, the Federal Government’s historic Stimulus and Future Packages are helping to stabilise the overall economy and mobilise important forward-looking investments in digitalisation, climate action, education and research.
In the Report entitled "Tackling the COVID-19 crisis, supporting the economic recovery, strengthening structures", the Federal Government presents central priority fields of economic and fiscal policy. It also assesses the measures taken in 2020 and provides an outlook to this year’s macroeconomic development. The German version of the Annual Economic Report also contains an Annex which provides a detailed inventory of the measures taken since the submission of the 2020 Annual Economic Report as well as the measures planned for 2021.