Strong exports helped German economy to stay afloat in the fourth quarter

German economy grew 0.1% in the final quarter of 2020 with robust exports contributing to a minimal growth and preventing further contraction as a second wave of coronavirus hurt the economy.

Renewed lockdown at the end of the year hit private consumption, but exports and construction kept the economy afloat, after it grew 8.5% in the third quarter.

German economy shrank by a smaller than expected 5% in 2020, which is the second biggest economic plunge since the WW2, as the economy contracted by the record 5.7% during the financial crisis in 2009.

The German government slashed its growth forecast for 2021 to 3%, making a sharp revision from previous estimate of 4.4%, anticipating stronger than expected impact from the second coronavirus lockdown.

The government expects recovery to accelerate and the economy to regain its pre-crisis levels in the second half of the year, with the upswing expected to continue in 2022.

Chancellor Angela Merkel and state leaders agreed last week to extend the latest lockdown until mid-February as Germany struggles with a second wave and record daily numbers of Covid-19 deaths.