She was speaking after a meeting in Berlin with the premiers of Germany's 16 states. Merkel urged caution as the country moved toward further easing of coronavirus restrictions.
Physical distancing rules will remain in place across Germany and large events -- where contact tracing and distancing are not possible -- will remain banned until at least the end of October, the chancellor said.
Merkel added that infection numbers have stabilized at low levels.
“I am actually pretty satisfied that the rate of infections is at a constant and I say again, we are watching things very closely. We are very far from an exponential growth. We are constantly around R factor (reproduction factor) 1. Sometimes a bit above, sometimes a bit under,” she said.
Outbreak at a meat plant: In northern Germany, Toennies -- the owner of one of the country's biggest meat processing plants -- said it was closing after an abattoir registered that some 400 of its workers tested positive for the virus. The local authority closed schools and kindergartens as a precaution.
Economic woes: Merkel said that the pandemic has hit the German economy hard. “The negative impact on the economy is the most serious we have ever experienced in the history of the federal republic,” Merkel said.
Germany has managed to keep its coronavirus death toll relatively low despite a high number of cases. The country's Robert Koch Institute for infectious diseases reported 580 new cases within the past 24 hours and 26 deaths.
The number of confirmed cases in Germany stands at 187,764, with 174,100 recoveries, according to the institute.