In a new report, the OECD has praised Germany’s handling of COVID-19, stating that the federal and state governments have taken effective measures against the pandemic and its consequences - with the effect that an economic recovery will come sooner than anticipated. 

Germany’s coronavirus response fares well in international comparison

The OECD (Organisation for Economic Cooperation and Development) has used its new Economic Report for Germany to praise the federal government and federal states for their successful policies, by international standards, in fighting the COVID-19 pandemic and its social and economic consequences.  

The report emphasises the high efficiency of the German healthcare system, highlighting how “resolute government action made it possible to strengthen the capacities of the health system while protecting jobs and companies.” Policies such as the short-time work (Kurzarbeit) scheme and the coronavirus stimulus package are also singled out for praise. 

Pandemic put pressure on digital technologies

However, the unprecedented adoption of digital technologies, as people were asked to work from home and schools and universities moved teaching online, had the effect of redoubling pressure on Germany’s already outdated infrastructure. The report concludes that digital technologies must be used more efficiently and quickly in the federal republic to aid future economic growth. 

To this end, the OECD recommends the further removal of barriers to the spread of technology in Germany, in particular to provide targeted support to small, medium-sized and start-up companies and to further develop the digital skills of employees. 

German economy expected to grow in 2021 and 2022

Federal Minister of Economics Peter Altmaier welcomed the report, reading it as an endorsement of the federal government’s approach to managing the crisis. He pointed out that some of the recommendations were already being implemented with new policies, such as those designed to encourage the expansion of super-fast broadband and mobile networks. 

Federal Finance Minister Olaf Scholz also referred to the report during the budget debate in the Bundestag on Tuesday, when he announced that the economy and labour market in Germany were recovering faster than forecast: “The programmes launched this year have helped Germany deal with the economic and social consequences of the corona crisis much better than many have predicted,” he declared. “And we are being praised internationally for this reaction.” 

The OECD report predicts that Germany will recover from its coronavirus recession, with gross domestic product growing by 2,8 percent in 2021 and by 3,3 percent in 2022. Some areas of the economy have already reached pre-crisis levels.