The signs of a recession in Germany, Europe’s largest economy, are becoming more apparent. The Bundesbank reports this in a monthly report.
In addition, the shutdown of Russian gas supplies to Germany will lead to rising energy prices and increasing uncertainty among companies and households in the country, according to the German central bank.
“There are increasing signs of a recession in the German economy, in the sense of a clear, broad and sustained decline in economic output,” the Bundesbank said. While gas supplies are likely to prevent gas in Germany from formally rationing this winter, economic output will “slightly” fall in the third quarter, according to the central bank.
According to the Bundesbank, there will be a “noticeable contraction” in the fourth and first quarters of next year. However, the central bank does indicate that the outlook is still “extremely” uncertain. Inflation is also expected to rise further in the coming months.