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The German economy is expected to contract by 6.5% in 2020 due to the coronavirus outbreak, said Lars Feld, head of the government’s council of economic advisers.

Key takeaways 

“Coronavirus impact on the world economy is more severe than previously expected.”

“Council expects a slow recovery in the second half of the year, a GDP growth of 4.9% in 2021.”

“Economic slump will be prolonged if coronavirus cases jump again.”

“German economy is likely to shrink by up to 11% in the second quarter.”

Market reaction

Germany’s DAX 30 Index stretched higher in the last hour and was last seen gaining 2.7% on the day at 12,595 points.