COVID-19 as the starting point for renewal in Germany

How the German economy can cope with the COVID-19 pandemic and use the crisis as an impetus for change

In addition to the German health system, COVID-19 also poses major challenges for the German economy. So far, it has been possible to avoid overloading the health system - but fighting the coronavirus is a acid test for health care providers and insurers. According to estimates by the McKinsey Global Institute, a loss of gross domestic product of 5% or 10% is to be expected in Germany in 2020 and a return to the GDP level of the end of 2019 is to be expected in Q1 2021 or Q3 2023, depending on the scenario. In purely economic terms, the COVID-19 crisis can be seen as an occasion to fundamentally drive forward the (digital) structural change in the German health system and in some industrial sectors. Two maxims would form the basis for this:

• Strengthening the industrial location through capital investments and further development of digital business models

• Expansion of the skills relevant for digitization.

If such a structural change towards digital business models and the use of the potential of automation and artificial intelligence can be implemented consistently, McKinsey assumes that the German economy will be able to return to the growth path in 2028 that it would without the COVID-19 crisis would have achieved. Otherwise, a return to the original growth path in this decade would no longer be feasible.