BERLIN (Reuters) — DIHK chambers of industry and commerce in Germany predict that the most prosperous economy in Europe will contract by a minimum of 10% in 2020 as a result of the pandemic. This was announced by its president and offered a much gloomier outlook than the government gave.
As the president Eric Schweitzer highlighted when showing the newest research data from industrial firms, there isn’t a way to avoid an unprecedented fall.
The DIHK’s estimate is in double digits and differs from the 6.3% of the government forecast for this year.
As Schweitzer further added, businesses in the country are faced with a huge obstacle, the biggest one since World War Two, and that this explains why so many firms are dealing with liquidity issues.
The survey was conducted on 10k industrial firms in May and displayed 3/4 of a decline in demand, and 80% of the surveyed companies said they anticipated a downturn in sales.
Around half of the industry firms are freezing their investments and cutting budgets due to the pandemic.
Moreover, nearly 1/5 of them are in the process of reorganizing supply chains, thanks to the problems offset by the Covid-19 worldwide.
As Schweitzer noted, the global marketplace shares are being allocated. At the same time, Volker Treiker, a trade expert in DIHK, stated that he thinks the country’s export strength will weaken by a whopping 15% since there is less demand for big export countries like the USA.
The president of DIHK said they are anticipating a growth of 5% for 2021 when it comes to the overall state of the economy.