German companies cut their investments for the third consecutive quarter at the end of last year, leaving the economy troubled and vulnerable even before the coronavirus outbreak to create a new threat to global growth.

According to economists, this means that Europe’s largest economy has entered 2020 by not sufficiently prepared for the epidemic that is now destroying supply chains already affected by trade tensions last year. Business investment has fallen, and machine costs have fallen the most in the last three and a half years. Exports also decreased, while household consumption remained unchanged from the previous reporting period. As a result, Europe’s largest economy sent last year with its worst performance since 2013.

The Bundesbank has warned that German exporters are likely to be negatively affected by the epidemic, adding that no economic growth is expected in the first quarter of the year.

The business confidence indicator unexpectedly rises in February, suggesting that companies predict the epidemic’s impact will be short-term. However, the result of the Ifo Institute study does not account for the latest escalation in the number of coronavirus infected in Europe.

Puma SE, however, said the virus would not affect their businesses in the long run and predicted a 10% increase in profits this year.

Ifo Institute president Clemens Fust said Germany could see a growth of 0.2% this quarter. The Governing Council of the European Central Bank, Philip Lane, expects a resumption of V-shaped growth in the euro area economy once the epidemic is controlled. The ECB will hold its next monetary policy meeting and publish new forecasts on March 12.