FRANKFURT — Germany is heading into recession as inflation is expected to top the 10% mark, the Bundesbank said in its monthly report on Monday.
“There are growing signs of a recession in the German economy in the direction of a clear, widespread and prolonged decline in economic output,” the report said.
The central bank expects a moderate contraction for the current quarter and more pronounced declines in activity in the last quarter of this year and the first quarter of next year.
“High inflation and uncertainty about energy supply and its costs affect not only the gas and electricity-intensive industry, its export activities and investments, but also private consumption and service providers. of services that depend on it,” the central bank said.
The Bundesbank did not provide specific figures and warned that the outlook for the eurozone’s largest economy remained shrouded in uncertainty. The heavily industrial German economy is highly dependent on Russian gas, which makes it particularly vulnerable to fallout from the war in Ukraine.
At the same time, inflation is expected to pick up further and reach double-digit rates in the coming months, according to the report.
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