The Bundesbank said in its six-monthly forecast that Germany would likely experience a deep recession in 2020 as it suffers the knock-on effects of economic restrictions to contain the coronavirus pandemic.

The bank said a contraction of up to 7.1 per cent was likely, worse even than the 5.7-per-cent fall in GDP Germany experienced in the wake of the 2009 financial crisis.

The bank gave a brighter forecast for 2021 and 2022, when the economy is expected to grow by 3.2 per cent and 3.8 per cent respectively.

The bank based this forecast on the assumption that either an effective treatment or vaccine for the coronavirus would be available by the middle of next year, boosting economic recovery.

Germany’s economic outlook had improved considerably since the forecast had been completed, the bank said, in light of a massive 130-billion-euro (147-billion-dollar) stimulus package agreed by the government earlier this week.

“However, there is a very high degree of uncertainty about further developments,” said Bundesbank president Jens Weidmann.

Germany’s Federal Statistical Office previously said GDP shrank by 2.2 per cent in the first quarter of 2020 compared to the previous quarter, plunging Europe’s largest economy into recession.

This, even though economic restrictions imposed to combat the virus in the first quarter only affected March.