Germany heading for recession, says council of economic advisors.

Recession in Europe’s largest economy is now inevitable in the first half of this year, Germany’s council of economic advisers announced on Monday, predicting that output could shrink by as much as 5.4% 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% this year before potentially growing by 3.7% next year.

Widespread halts to production and longer-lasting public health measures, could however lead to the economy contracting by 5.4% this year, 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 generally define a recession as two consecutive quarters of negative growth.

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