Germany: 2021 Article IV Consultation — Press Release; Staff Report; and Statement by the Executive Director for Germany

IMF Staff Country Reports, July 15, 2021

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Germany’s economy contracted by just under 5 percent in 2020, outperforming most European peers.
Renewed waves of infections and associated lockdowns caused economic activity to plunge again in the first quarter of this year.
The pace of mass vaccination has picked up and the economy has started to reopen.
The recovery path is beset with risks, particularly with respect to the progress of the pandemic and supply shortages in major industries.
The authorities have maintained appropriately accommodative fiscal and financial policies.
Most measures supporting households and firms have been extended through 2021.

Growth and pandemic impact:
- Contraction in 2020: just under 5 percent.
- Further plunge in economic activity in Q1 (first quarter) of this year due to renewed infections and lockdowns.
- Recovery underway as vaccinations pick up and reopening proceeds.
Key risks to the recovery:
- Progress of the pandemic.
- Supply shortages in major industries.

Fiscal and financial policy:
- Authorities maintained appropriately accommodative fiscal and financial policies.
- Most measures supporting households and firms were extended through 2021.