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| - A panel of economists that advise the German government said Tuesday Europe's top economy will likely shrink 6.5 percent this year but that the post-coronavirus recovery will begin "from the summer". "Economic developments in Germany will likely fall close to the deep 'V' scenario" described in an emergency forecast in March, the so-called "Wise Men" expert panel (SVR) said in a statement, referring to a sharp plunge and relatively swift rebound. "From the summer, a gradual recovery should get going, making for 4.9 percent growth in 2021," said the "Wise Men" -- who for the first time this year include two women on their five-strong panel. The economists particularly singled out "the bad foreign trade environment", set to impose a "significant" burden on some of Germany's most important industries this year as infection control measures persist around much of the globe. "Nevertheless, as the year continues, falling numbers of infections and gradual loosening of contact restrictions in Germany and important trade partners will create the conditions for a recovery," they said, highlighting also Berlin's generous support to business and workers. Separately, Federal Labour Agency (BA) chief Detlef Scheele said unemployment would likely rise above three million in the summer. But "hopefully the number will sink back down after that," he told the Sueddeutsche Zeitung daily. Bundesbank chief Jens Weidmann said at the weekend that "the trough should be behind us by now". "Things are looking up again. But the deep slump is being followed only by a comparatively gradual recovery," central bank chief Weidmann said. German MPs are currently debating an update to the 2020 budget, including measures such as a temporary VAT cut to boost consumption and a 300 euro ($339) per child bonus for families. The new moves come on top of loan guarantees for businesses, an extended shorter-hours scheme to prevent mass layoffs and other measures totalling over one trillion euros in a coronavirus rescue package announced in March. Finance Minister Olaf Scholz plans to borrow around 218 billion euros this year to pay for the government largesse, blasting through a financial crisis-era "debt brake" written into the constitution in 2009. tgb/mfp/bmm
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