Comments by Ifo economist Klaus Wohlrabe
- Anticipates growth of 2.1% in Q4
- Forecast is barring a second lockdown
- Closure of schools, daycare would have massive impact on the economy
- Export expectations have deteriorated given latest virus situation
- Auto sector is an exception to the gloom in the general economy
Germany is on the precipice of seeing its virus situation escalate in a similar manner as we have seen with Spain and France recently, and such a turn of events would be a major blow for Europe's biggest economy.
The active virus cases reported across the country has doubled from 50,000 to over 100,000 in just 10 days with over 250 districts now deemed as 'high risk' areas.
As mentioned in the daily reports, if this sees tighter restrictions introduced, it will weigh more heavily on the economic prospects of the country and the region. In turn, that will present more of a headwind for risk assets and the euro as such.