According to an announcement made late last week by the Statistisches Bundesamt, as COVID-19 forces Germany into recession, with the biggest quarterly decline since the 2008 international financial and economic crisis, over 100 banks in the nation have started charging clients negative interest rates.

According to data shared on May 15 by Germany’s Federal Statistical Office, Statistisches Bundesamt, the European heavyweights have now entered the recession. As per the data shared by the German Federal Statistics Office:

“The corona pandemic hits the German economy hard … [Q1’s contraction] was the largest decrease since the global financial and economic crisis of 2008/2009 and the second-largest decrease since German unification.”

COVID-19 forces Germany into recession

Moreover, the statistical agency claims that a substantial decline than the latest fall was only recorded back during Q1 of 2009 with a -4.7 percent drop. During Q1 this year, Europe’s biggest economy dropped off by 2.2 percent. In addition, the Eurozone economy recorded a sharp 3.8 percent decline within the same period.

German economists, including the experts from Deutsche Bank, predict an even greater tumble during Q2, as the impact of the COVID-19 pandemic becomes evident. Chancellor Angela Merkel apprises that if the transmission rate of COVID-19 rises, Germany could be forced back into forced lockdown.

Number of banks charging negative interest rates escalating

Over the recession period and over the course of the coronavirus pandemic, the number of financial institutions charging negative interest rates has been escalating fast. Back in April, only about 80 banks were charging their clients negative interest rates. However, currently this number has increased to over 100 banks. 

According to the German consumer comparison portal, Verivox, over 800 German banks have been studied. Virivox’s investigation has revealed that over 100 banks are currently charging negative interest rates in Germany. The contrast portal has grouped the banks in three classifications.

Furthermore, 94 of the banks have shared their fresh rates online or on their price catalogues. On the other hand, 10 banks are charging fees on demand deposits accounts that are normally free, giving an actual negative interest rate on such accounts. As per the portal, 22 other banks are also charging negative interest rates, but they are yet to publish the new rates online or share.