This article is translated and republished from the original article in German by Inga Fechner, economist at ING.
Chart of the Week
Numerous restrictions have been in place for over a week to reduce the spread of COVID-19. Schools and stores are closed. Places that tend to be bustling with people, especially when the weather is pleasant, are now eerily empty. It is no surprise that sales in the retail sector have plummeted, as our chart of the week shows.
Daily turnover in Germany and Austria (% change compared to the previous week)
Source: Suburbia, ING Economic & Financial Analysis
While extensive restrictions have been in effect in Austria since March 16, which were announced on March 13, the German government took a little longer to act. Yet, at the same time, public life was grinding to a halt. People’s increasing adoption of social distancing is clearly evident in retail sales since the weekend of 13th March, as we determined from data from Suburbia. Turnover across restaurants, hotels and leisure venues dramatically dropped over the weekend, compared to the previous weekend.
The restrictions are still in effect, at least until Easter, and will continue to be a problem for numerous economic sectors. Fiscal support measures by governments and central banks are an important step in cushioning the impact of the slump. However, the impact cannot be completely reversed. At least for this year, we will see negative growth for the first time since the financial crisis for many economies.