NewsRescue
The Bundesbank said on Monday that German economic output stagnated in the second quarter of 2023 after shrinking in the previous two quarters, and growth is anticipated to remain subdued in the near future.
“Economic output is likely to more or less stagnate again in the third quarter of 2023,” noted the central bank in a monthly report.
According to the prediction, industrial output will remain poor, as international demand has recently declined.
“High financing costs are likely to continue to weigh on investment.” They are also continuing lowering construction demand, which is expected to be reflected in production,” the German regulator stated.
The Bundesbank also said the German government will record a significant deficit in 2023 as it continues to provide extensive crisis-related support to enterprises and households, mainly by using energy price brakes.
On the plus side, the report forecasted that the rebound in private consumption will likely continue due to stable employment and good pay growth, as well as lowering inflation, giving a boost to the services sector.
The International Monetary Fund predicted last month that Germany will be the only G7 economy to decrease this year as a result of the energy crisis.
