Germany's Economy to Gradually Recover by 2026, Bundesbank Reports
The Bundesbank warns that Germany's multiyear recession is expected to only gradually improve, with a slow recovery anticipated to extend into 2026.
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"German Economy Faces Recession as Bundesbank Warns of Shrinking Growth"
The Bundesbank has warned that the German economy is expected to continue shrinking, citing the ongoing impact of the coronavirus pandemic. This warning comes as the central bank revised its growth forecast for 2021, projecting a contraction of 5.5% compared to its previous estimate of 3%. The Bundesbank also emphasized the uncertainty surrounding the economic outlook, particularly in light of the resurgence of COVID-19 cases and the potential impact of Brexit.
"Germany's Economy: Navigating Recession and Uncertainty"
The Bundesbank reported that Germany is likely in a recession due to weak external demand, cautious consumers, and high borrowing costs, with the economy potentially declining in the first quarter of 2024. The country's heavy industry, reliant on energy, is facing challenges in international markets, prompting discussions about economic transformation. The government attributes the downturn to high energy costs, weak Chinese demand, and rapid inflation. The Bundesbank expects the weakness to persist, with declining industrial demand, dwindling order backlogs, and firms holding back investment due to rising financing costs. Despite the weak outlook, the bank does not anticipate a major deterioration in the labor market and believes Germany is not facing a prolonged recession.