The contagion has continued to spread worldwide and a member of Germany’s Christian Social Union (CSU) party has declared his “concern” over the effect the virus could have, not just on Germany but also the global economy. CSU leader, Markus Soder told Bavarian newspaper Muncher Merkur, he believed if the virus continues to spread it could replicate the impact of the financial crisis of 2008.
He said: “Coronavirus as a global phenomenon could have a similar effect to the financial crisis.”
He also added he is currently “already concerned and vigilant” about the long-term impacts to German industry.
With car manufacturers being hit hard by the lack of export access to China, the Federation of Dutch Industry (BDI) said Germany is facing the longest recession since 1990.
The quarterly report for the country said “economic growth is almost at a standstill”.
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It also stated it must Berlin work “swiftly” to take action before the situation worsens.
Before the virus hit, the government had estimated a 1.1 percent growth of the economy in January.
Now the industry expects the economy to grow just by 0.5 percent this year.
In the last quarter of 2019, Germany’s economy condensed by 5.7 percent year on year.
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Mr Felbermayr said: “We will probably bring a little more production back to Europe here in the long term, that the value chains will become a little shorter and that globalisation will decrease a bit.”
While the Germany economy is struggling due to the lack of export routes to China, the FTSE 100 also fell on Thursday.
The stock market dropped to a low of 6,675 points due to the spread of coronavirus.
Last week, the stock market had suffered its worst decline since the 2008 financial crisis and according to Goldman Sachs, the UK economy looks set to be pushed into recession.
The bank stated the UK economy will contract or shrink by 0.2 percent between January and March, marking the second consecutive quarter to do so.
The bank said: “The UK is highly exposed to global activity which we expect to contract in the first quarter, tourism exports are significant and the virus is spreading steadily within the UK.”
The UK has reported 116 cases of the virus so far while Germany stands at 514.
The effect of the coronavirus was particularly felt in blue-chip stock – stock which has reliability or national standing.
Due to its impact, an estimated £251billion was taken off the value of UK’s biggest companies.
Additional reporting by Monika Pallenberg.