2023-08-21 15:11:31
Berlin – Qena
Posted on: Monday, August 21, 2023 – 6:11 PM | Last update: Monday, August 21, 2023 – 6:11 PM
The expectations of the German Central Bank indicated that the German economy will not achieve growth in the third quarter of this year, following the recession that it also recorded in the second quarter.
“German economic output is likely to remain largely unchanged once more in the third quarter of 2023,” the bank’s monthly report published today said.
At the same time, the Bank saw that private consumption might boost the economic situation in light of the stable employment movement and the strong rise in wages with low inflation rates.
The bank said in its report that “job growth will likely remain strong and will even continue into the new year.”
The bank noted that weak demand from abroad would continue to affect industrial production, highlighting that high interest rates hindered demand for construction and investment goods.
According to the bank’s estimates, inflation rates are expected to continue declining in the coming months due to lower energy prices.
It is expected that the Federal Statistical Office will publish, next Friday, details of the development of the German gross domestic product in the period between April and June.
The German economy recorded in the first half of this year what is known as a technical recession, which refers to the economy’s exposure to GDP contraction for six months in a row (two consecutive quarters).
The central bank recently predicted an inflation rate of 6% in Germany, as measured by the harmonized index of consumer prices, which is a crucial factor in determining the ECB’s monetary policy.
The energy price shock in the followingmath of the Russian war on Ukraine last year caused a general rise in the inflation rate in Germany and the rest of the European Union.
It is noteworthy that the European Central Bank seeks to reach the inflation rate in the euro area at 2% in the medium term, and the European Central Bank raised interest rates in the recent period nine times in a row to combat rising inflation in the European common currency area.
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