© Archyde.com. The German Central Bank sees signs of economic stagnation multiplying amid the energy crisis
The Bundesbank said it was increasingly likely that Europe’s largest economy would contract for an “extended period” under pressure from Moscow’s cutbacks on energy supplies to the continent.
In its monthly report issued on Monday, the bank stated that the signs of stagnation in the German economy are multiplying, warning of a widespread and long-term decline in economic output.
He expected the economy to contract slightly in the third quarter of this year, before a noticeable decline occurred during the last three months of 2022 and the beginning of 2023.
The German central bank also predicted that the country might avoid official rationing of fuel in the coming months, but it saw that the necessary reductions in consumption will prompt companies to reduce or temporarily stop production.
However, he made clear that the impact of this is unlikely to be as bad as the scenario the bank plotted in June, when it forecast the economy will contract by 3.2% in 2023.