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The German economy is multiplying the signs of running out of steam. A recession seems more and more inevitable, energy crisis obliges. Inflation is at historic highs. The highly exporting industry is suffering and domestic consumption as well.
With our correspondent in Berlin, Pascal Thibaut
Almost every day, a new study darkens the picture and predicts a recession for the German economy. The Bundesbank’s monthly report on Monday confirms other projections. The central bank, too, is banking on a recession.
After the very symbolic increase in gross domestic product in the second quarter of 0.1%, the Bundesbank expects a decline in the fourth quarter and the beginning of 2023. For next year, the central bank does not advance figures. The economic institutes IFO and IFW are counting on a decline of 0.3 or even 0.7% next year.
The war in Ukraine and the energy crisis explain this sudden deterioration in the economic situation, which calls into question earlier, much more positive forecasts. Soaring energy prices are attacking one of the pillars, and not only in the short term, of “made in Germany”, the success of which is explained by a highly export-oriented industry.
The significant rise in inflation, which could exceed 10% in the coming months, is detrimental to private consumption. The service providers who depend on it are also affected.