Germany has plunged into a recession with the worst quarterly contraction since the global financial and economic crisis of 2008, according to official data. Over 100 banks in the country are now charging customers negative interest rates.
Germany Enters Recession
The German economy is now in a recession according to data released Friday by the country’s Federal Statistical Office, Statistisches Bundesamt. The authority announced:
The corona pandemic hits the German economy hard … [Q1’s contraction] was the largest decrease since the global financial and economic crisis of 2008/2009 and the second-largest decrease since German unification.
“A larger quarter-on-quarter decline was recorded only for the 1st quarter of 2009 (-4.7%),” Statistisches Bundesamt confirmed. The Federal Statistical Office reports to the Federal Ministry of the Interior. Europe’s biggest economy shrank 2.2% in the first three months of the year. The eurozone economy fell by its sharpest rate on record at 3.8% in the first quarter.
Economists, including those at Deutsche Bank, expect a worse slump in the second quarter as the full effects of the lockdown become apparent. Chancellor Angela Merkel has warned that if the coronavirus’ transmission rate worsens, Germany could return to the lockdown measures.
Over 100 Banks Charging Negative Interest Rates
Throughout the recession and the covid-19 crisis, the number of banks charging negative interest rates in Germany has been climbing rapidly. In April, news.Bitcoin.com reported that 80 banks were passing on the burden of negative interest rates to some of their customers. At the time of this writing, that number has grown to more than 100 banks.