Deutsche Bank lowers its forecast for the German economy in view of the disruption caused by the spread of the coronavirus, saying that the largest economy in the Eurozone will now shrink by 4-5% in 2020 while industrial production may face a 10% drop.

“Within days, measures to block and (temporarily) close companies have reached a level that suggests a far greater contraction in the first half of the year than previously thought”, said Deutsche Bank Chief Economist Stefan Schneider, adding that before Germany’s economic growth was expected to slow between 1-2% this year.

It is estimated that, unlike the financial crisis in 2009, the services sector will also be severely affected, Stefan Schneider added.

Deutsche Bank also updates its forecasts for other major economies. It expects the US economy to shrink by 0.8% this year, while Japan’s economy will decline by 1.7%. The German creditor’s projection for global economic growth is already up 2.0%.

Earlier today, the European Central Bank said it would buy more 750 billion EUR in bonds as part of measures to tackle the spread of the coronavirus. The package is called the “Pandemic Emergency Purchase Program” (PEPP) and is planned to be implemented by the end of 2020 or by the end of the coronavirus crisis.