Germany’s IFO: Economy likely to shrink by 6.6% this year

Dhwani Mehta FXStreet

Germany’s highly influential institute IFO is out with its view on the economic outlook, noting that the economy likely to shrink by 6.6% this year.

Additional points

“Economy likely to grow 10.2% next year.

Q2 likely to see a contraction of 12.4% due to the coronavirus crisis.

Some sectors including aviation, travel, hospitality and autos are expected to experience a longer recovery period.

In case of slow normalization lasting up to 16 months, the economy could shrink 9.3% this year and growth 9.5% next year.

In case of fast normalization lasting up to 5 months, the economy could shrink 3.9% this year and growth 7.4% next year.”

Market reaction

EUR/USD keeps gains around 1.1020 amid broad US dollar weakness and EU’s recovery fund led optimism.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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