According to the report from Ifo Institute, the Coronavirus will bring hundreds of billions of euros of production losses to Germany's economy, cause short-time work and unemployment to skyrocket and put a significant strain on the state budget.

"The costs are expected to exceed anything known from economic crises or natural disasters in Germany in recent decades," says Ifo president Clemens Fuest. "Depending on the scenario, the economy shrinks by 7.2 to 20.6 percentage points. This corresponds to costs of 255 to 729 billion euros."

"It is therefore worth spending almost every conceivable amount on health policy measures. The aim must be to shorten the partial closure of the economy without affecting the fight against the epidemic," says Fuest. "Strategies are needed to combine a resumption of production with further containment of the epidemic."

"If the economy is partially shut down for two months, costs will be between 255 and 495 billion euros, depending on the scenario. Economic output then shrinks by 7.2 to 11.2 percentage points in the year," says Fuest. In the best-case scenario, economic output falls to 59.6 percent for two months, then recovers to 79.8 percent in the third month and finally reaches 100 percent again in the fourth month. "With three months of partial closure, costs have already reached 354 to 729 billion euros, or 10.0 to 20.6 percentage points of growth loss," says Fuest.

According to Ifo calculations, a single week of extension of the partial closure will result in additional costs of 25 to 57 billion euros and thus a decline in growth of 0.7 to 1.6 percentage points. An extension from one to two months increases costs up to 230 billion euros, or 6.5 percentage points of growth.