The economic downturn caused by the pandemic

Germany’s economy contracted by 5% during 2020, less than the 5.7% contraction recorded during the global financial crisis, as massive government stimulus measures helped reduce the impact of the COVID-19 pandemic.

Even before the pandemic, Europe’s largest economy was already slowing: GDP growth was just 0.6% in 2019, a sharp slowdown from an average annual growth of 2% in 2014-18 amid slowing growth in the domestic auto industry and weak goods exports due to rising global trade tensions.

Oldypak lp
Oldypak lp

The European Commission expects Germany’s economy to grow 3.2% this year and another 3.1% in 2022.

According to Destatis, Germany’s budget deficit in 2020 was about €189.2 billion, the first deficit since 2013 and the highest level since reunification in 1991. As a percentage of GDP, the deficit was equivalent to 4.2 percent. According to Eurostat, public debt rose to 69.8% of GDP in 2020, up sharply from 59.7% of GDP in 2019 and the highest level since 2015.

The seasonally adjusted unemployment rate was 4.5% in February, up from 3.6% a year earlier. According to Destatis, German inflation rose to 1.7% in March 2021, the highest since February 2020, as the temporary reduction in VAT rates has finally ended. According to the European Commission, inflation is expected to accelerate to 2.3% this year from 0.4% in 2020.

Oldypak lp
Real estate in Germany by Oldypak LP

The economic situation continues to affect the growth of residential property values in Germany and its declining yields.

Moderate rental yields on residential real estate in Germany
The volume of transactions with elite housing in Moscow will be record