Bundesbank: Little Evidence of a German Economic Recovery in Q2
21 March 2024
By Isabel Teles – FRANKFURT (Econostream) – Germany is unlikely to see an economic recovery in the second quarter of 2024, mostly due to the weak industrial performance, the German Bundesbank said on Thursday in its latest monthly report.
‘[T]he survey indicators continue to be depressed, such as business expectations, there is currently little evidence of an economic recovery for the second quarter’, the Bundesbank said.
According to the report, ‘economic recovery of the German economy is being delayed’, as, among other factors, the German industry had not yet overcome its weak phase and would continue to struggle.
‘The real gross domestic product (GDP) is likely to fall slightly again in the first quarter. The German economy continues to experience headwinds from various directions. Industry will likely remain in a weak phase’, the Bundesbank said.
In February, core inflation remained virtually stable at 3.5%, but services inflation was still above average, according to the report. Compared to the previous year, the HICP fell from 3.1% to 2,7%, the report said.
‘The inflation rate is likely to continue to decline in the coming months’, the Bundesbank said. ‘While a noticeable decrease in price pressure can be expected for food and non-energy industrial goods, a significantly slower disinflation process can be expected in the services sector. The current strong wage growth also contributes to this.’