The coronavirus outbreak has made a recession in Europe's largest economy inevitable in the first half of this year, Germany's council of economic advisers said on Monday, predicting that output could shrink by up to 5.4 percent this year.
The panel, which advises the government on economic policy, said its baseline scenario - in which the economic situation would normalise over the summer - was for the economy to contract by 2.8 percent this year before potentially growing by 3.7 percent next year.
But a more marked 'V' shaped recession curve with widespread halts to production or longer-lasting public health measures, could lead to the economy contracting by 5.4 percent this year before growing by 4.9 percent in 2021 thanks in part to a statistical overhang, it said.
"The coronavirus outbreak has stopped the incipient recovery," the advisors said in a report that they handed to the government on March 23 but only published on Monday. "The German economy will shrink significantly in 2020."
Economists usually define a recession as two consecutive quarters of negative growth.