Germany’s economy is set to shrink 7.1 percent this year due to the impact of the coronavirus, or Covid-19, the think tank IfW Kiel said in a report on Tuesday.

However, the biggest euro area economy is forecast to entirely reverse the contraction with 7.2 percent growth next year.

“The low point of the crisis has been overcome, but the catch-up process continues well into the coming year,” IfW Kiel said.

In the second quarter, the German GDP is expected to fall a massive 11.3 percent from the previous three months, marking the biggest quarterly decline since the Federal Republic formed, IfW economic chief Stefan Kooths said.

Unemployment is set to increase to 3 million people this year and the jobless rate is seen to climb to 6.1 percent, the think tank added.

The material has been provided by InstaForex Company –