Coronavirus Impact On Germany: Europe’s Largest Economy Put On 'Red Alert' Amid Outbreak

Germany’s Leibniz Centre for European Economic Research (ZEW) said Tuesday that Europe’s largest economy is now on “red alert” due to the ongoing coronavirus outbreak.

A monthly survey by the institute indicating how investors feel about Germany's economy dropped to -49, from 8.7 in February. This is the lowest drop since the survey began in 1991.

“The economy is on red alert,” ZEW President Achim Wambach said.

Germany has shut down all bars, theaters, clubs and other social gathering places across the country in order to contain the spread of the coronavirus. In addition, Germany has closed its borders to the neighboring countries of France, Austria and Switzerland.

The German economy was already facing low economic growth prior to the virus, with the country narrowly avoiding recession last year. GDP showed no growth in the fourth quarter of 2019 after 0.2% growth in the third quarter.

Trade tensions, along with Brexit, have hurt the export-reliant economy. The ongoing tariff war between the U.S. and China has hurt German automakers and other companies that rely on sales to the Chinese market.

The coronavirus outbreak will not only harm Germany’s exports to other countries affected by the pandemic but also private consumption, as Germans stay at home. Berlin has pledged unlimited cash to German companies that are negatively impacted by the virus.

According to Johns Hopkins University, there are at least 8,604 cases of coronavirus and at least 23 deaths in Germany.