Dark Economic Clouds for Rest of 2020?

Major speech given by the Economics Minister (Pete Altmaier) yesterday.  ARD covered this.

Decline of the GDP by 6.3-percent?  Yes.

The decline path?  By June, it will have hit the worst point (their estimate).  Some recovery talked about in 2nd half of 2020, but it might be early 2022 before you get back to the state of affairs that Germans enjoyed at the end of 2019.  A fairly long period of time before good times roll in.

At the end of 2019, it was around 3.2-percent unemployment.   Right now, the talk is that unemployment will reach somewhere around 5.8 percent (this is the number given by Altmaier).  Please note that furlough folks are not really unemployed.....they are still on a contract with their company, and getting around 65-percent of their normal pay-check (soon to go to 80-percent).

The real pain here?  Fests, trade-shows, foreign visitors, travel situations, etc.  The government is already talking about some relief packages for the hotel and travel industry.....but nothing firm.

The fact that tax revenue is in trouble?  Right now, the missing revenue pot is figured to be around 150 billion Euro for the year of 2020.  People have clamped down, and one might suggest car purchases to be one of the major problems....with people pushing off the trade-in and purchase of a new car.

What'll happen for the rest of 2020?  Stimulus packages similar to what you probably saw in 2008. 

Here's the backside of this story though....several state elections in 2020, and they will be affected by the chaos and dismal woes.  National election?  The fall of 2020, and it'll be affecting folks as well.  I kinda doubt at this point that the Green Party can sell folks on any agenda, and their odds of getting Habeck in as Chancellor seem to be drifting away.  So it's likely to be another CDU victory, and some CDU insider replacing Merkel at that point.

The biggest disaster coming?  From my standpoint, the hotel industry really looks bad for the rest of 2020.  I don't see foreign guests coming, and it won't surprise me if a quarter of the operations go through some type of sell-off or bankruptcy.  Even the five-star operations will suffer to some degree.