Germany’s extended shutdown to curb the spread of the coronavirus will weigh on Europe’s largest economy but not choke it off, with economic institute Ifo forecasting quarterly growth of 3 per cent in the second quarter, according to Reuters.

Chancellor Angela Merkel and the country’s 16 states agreed on Tuesday to extend a shutdown until mid-February as Germany, once seen as a role model for fighting the pandemic, struggles with a second wave of infections.

Ifo said gross domestic product will likely stagnate in the first quarter before growing by 3pc quarter-on-quarter in spring.

“Every week with an extended lockdown directly leads to losses in sales, production and added value,” Ifo economist Timo Wollmershaeuser said.

Commerzbank economist Joerg Kraemer said the lockdown’s impact on retailers and services will likely lead to a GDP contraction of 2pc in the current quarter, adding the economy would normally grow by 2pc without restrictions on activity.