Germany faces recession and double-digit inflation, forecast says

19 September, 06:09 PM
Olaf Sholz (Photo:REUTERS/Fabrizio Bensch)

Olaf Sholz (Photo:REUTERS/Fabrizio Bensch)

The Bundesbank – Germany’s central bank – forecasts that the German economy will enter a recession and experience inflation in excess of 10%, news website Politico reported on Sept. 19.

“There are mounting signs of a recession in the German economy, in the sense of a clear, broad-based and prolonged decline in economic output,” the report said.

The forecast suggests the German economy will contract for three consecutive quarters, well into 2023.

“High inflation and uncertainty with regard to energy supply and its costs affect not only the gas and electricity-intensive industry and its export business and investments, but also private consumption and the service providers dependent on it,” the Bundesbank said.

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At the same time, the central bank didn’t make exact numerical forecasts of how much the economy will shrink, adding that annualized price inflation in Germany is expected to breach 10% in the coming months.

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