There is no end in sight to Germany’s economic downturn, but a recession is not imminent, the German central bank said in its latest monthly report published on Thursday.
“The German economy continues to face difficult conditions,” the Bundesbank report said.
Experts pointed to “increased economic uncertainty,” which is hampering business investment. “However, a recession in the sense of a significant, broad and prolonged decline in economic output is not currently expected,” the report said.
Higher borrowing costs are slowing the construction sector, while private consumption has failed to improve despite higher wages, the central bank said.
In addition, the labor market is starting to deteriorate, although the number of employed people in Germany is still high.
The Bundesbank predicted that Germany would show flat growth in the third quarter.
