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Rising number of infections: What would a second deadlock mean for the economy? – Economics

All economic forecasts today have one main limitation: Until a second lock is imposed. Because the economy is only recovering from the spring shutdown of production and trade. The growing number of corona infections in Germany, but also abroad, is viewed with great concern by business representatives. Israel is the first country to announce a complete second closure, while elsewhere there is talk of regional measures.

“Renewed production and business failures could endanger the entire livelihood, among other losses,” said Ilja Nothnagel, board member of the German Chamber of Commerce and Industry (DIHK) at Tagesspiegel. “In particular, sectors such as retail, catering or service providers that have been directly affected by the recent plant closure may not be able to cope with further pandemic-related downtime.”

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However, a second blockade on both the domestic and foreign markets would also be dramatic for German export-oriented industry. “The outlook for the export economy for next year is already difficult due to the global decline in demand for consumer goods and capital goods,” said Nothnagel. In addition, there would be pandemic-related restrictions in manufacturing plants abroad. “Politicians should also incorporate the experience of companies from recent months into anti-pandemic measures,” he said.

Some industries are still without business

A look at the UK, where the industry complained about falling orders on Tuesday, shows that the engine is still stuttering around the world. Experts previously assumed a plus.

Many companies in Germany got to the spring relatively easily thanks to government loans and assistance, such as short-term work benefits. However, there are industries, such as event management or booth construction, that are still barely able to do business. The aggravation of the current crisis would affect it even more. According to business circles, service sectors such as advertising would also have a problem if customers broke away from trade and production again.

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The second exclusion would also significantly increase costs for the state. It can be assumed that the aid would have to be re-granted and at the same time no tax revenue would be received, which in turn would make the necessary investments more difficult. In the end, almost every society would feel a downward spiral.

Trade demands BGB changes

As the Handelsverband Deutschland (HDE) said on Tuesday, the situation is still critical for many clothing retailers in city centers, and in many cases they cannot pay rent permanently. The association therefore called for an amendment to the German Civil Code (BGB): It must be made clear that state measures ordered during a pandemic are grounds for amending the lease. The Ifo Institute presented its economic forecast on Tuesday and expects minus 5.2 percent this year. But even here, Ifo chief economic officer Timo Wollmershäuser tried to emphasize: “Uncertainty in the forecasts is very great, because no one knows how the corona pandemic will continue.” Thorsten Mumme

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