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Press Release from 2020-12-08 / Group

KfW Research – outlook for the year

Beating the coronavirus crisis sustainably with a digital and green investment rally

  • End of crisis within reach as COVID-19 vaccine will soon be available
  • Growth spurt is possible from next spring
  • Economic policy must help businesses invest and encourage the workforce to upskill

With the prospect of an effective COVID-19 vaccine becoming available soon, there is a good chance that the German economy will overcome the consequences of the coronavirus pandemic next year. The return to public and social life from next spring will likely trigger a growth spurt. KfW Research expects economic growth of around 4% for 2021 after a decline of 5.3% this year. The pre-crisis level can probably be achieved again by the end of 2021. At her press briefing today in Frankfurt on the outlook for next year, the Chief Economist of KfW, Dr Fritzi Köhler-Geib, emphasised that Germany must now step up its efforts to advance the digital and climate-neutral transformation of the economy and society in order to safeguard the long-term competitiveness of local businesses.

“From next year we will need a digital and green investment rally in order to come out of the coronavirus crisis sustainably with a generally stronger economy”, said Dr Fritzi Köhler-Geib. “All economic actors must contribute – the state, the business community, the workforce and the banks.”

Business investment across the aggregate economy has probably plunged by around 8.5% as a result of the coronavirus crisis in 2020. SMEs are likely to be disproportionately affected by this slump, as the mandatory coronavirus restrictions have severely impacted on the services sector, which is strongly characterised by SMEs. Given the high losses in turnover caused by the pandemic-induced containment measures and the continuing high uncertainty about the progression of the crisis, businesses have a strong desire to secure and reinforce their financial resilience. However, this will go at the expense of capital expenditure that is actually needed to tap into growth areas emerging from the transition to a digital and climate-neutral economy.

KfW’s Chief Economist is convinced that all actors have a responsibility here. “Economic policy is now called upon to resolve the target conflict between financial resilience and capital expenditure in which many businesses find themselves”, Dr Fritzi Köhler-Geib stressed. “Now is the time to create the framework, provide incentives for investment and lead the way with start-up finance in order to make future growth possible in the two key areas of digitalisation and climate action. However, businesses and their employees must also undertake greater efforts themselves to harness the opportunities arising from the structural transformation with a forward-looking business model and appropriate further training. Obviously, in order to finance investment, it is essential to keep access to credit open.”


Portrait Christine Volk


Christine Volk


+49 69 74 31 38 67


+49 69 74 31 32 66