The economically difficult year is expected to end with a recession for the German economy. According to the latest monthly report, economic output will decline again in the fourth quarter of 2023. The economy had already contracted 0.1 percent in the summer quarter.
However, the Bundesbank expects the economy to recover slightly in the first quarter of 2024. Economists talk about a recession when two consecutive quarters are negative.
The industry is facing difficult conditions, particularly due to weak demand overseas and energy price shocks. There is no visible improvement in the construction industry either. The increased costs are impacting demand.
The Bundesbank also warns about inflation, although rates fell in October. Inflation rates may rise again in the coming months due to increases in the price of services and possible energy price increases. The threat of stagflation (inflation and recession) is looming over Germany.