The German economy is only gradually regaining momentum after the Covid-19-related slump. Although production bottomed out in April and should quickly make up some of the losses with the easing of the lockdown beginning in May, full recovery from the crisis will take some time. One reason is that some important export destinations are economically more affected by the Covid-19 pandemic than Germany, so that exports are only gradually picking up again. Moreover, companies will remain reluctant to invest for some time to come, as uncertainty will remain high and the equity basis of many companies is being negatively affected by the slump in sales. Private consumer spending is likely to recover somewhat faster, partly because the savings ratio, which rose sharply during the lockdown, is likely to decline again with the easing measures. As a result, the pent-up purchasing power will stimulate demand. However, the recovery in private consumption is also exposed to headwinds, as some private households are suffering income losses and larger purchases are being postponed in view of the increased job insecurity. All in all, we expect GDP to decline by 6.8 per cent in the current year, followed by an increase of 6.3 per cent in the coming year. On the labor market, the decline in production is cushioned by short-time working and losses in productivity. Nevertheless, the number of people in employment is falling sharply, and the unemployment rate will rise from 5 percent in 2019 to 6.1 percent in 2021. The budget deficit will increase to about 6 percent of gross domestic product in the current year, and will remain at around 3 percent next year, when revenues have stabilized and many of the stimulus packages have expired. The debt-to-GDP ratio stays above 70 percent in both years, after 60 percent in 2019.