Economy

Signs of increasing recession in Germany: Bundesbank

Signs of increasing recession in Germany: Bundesbank

Today, Monday, the German Central Bank considered that Germany has entered the stage of “generalized and permanent net decline” in its economy, noting that “recession indicators are increasing.”

The agency said in its monthly bulletin published on Monday that this was mainly due to “general economic supply conditions – especially energy supplies – which have deteriorated significantly as a result of the Russian war against Ukraine”.

no inflationwhich continues to rise – about 8% annually in August – as uncertainty about energy supplies and costs will affect “energy-producing” sectors that rely particularly on gas, hurting their exports and investments, “as well as private consumption and energy certified service providers”, As the Bundesbank says.

Due to the interruption of deliveries of Russian gas to Germany, on which the country depended for 55% before the war in Ukraine, the supply situation of this fossil energy “will be very tense in the coming months,” the Bundesbank warns.

The monetary institution predicts that after a modest 0.1% rise in the second quarter of the year, German GDP will decline “significantly in the fourth quarter” and “most likely, in the first quarter of next year”.

We talk about a technical recession when there are two consecutive quarters of lower GDP.

The head of the German Central Bank, Joachim Nagel, made a similar forecast in early September, considering “the possibility of a recession in the recession at the end of the year and the beginning of 2023”.

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