Germany has entered a phase of “sharp, widespread and long-lasting decline” in its economy amid skyrocketing energy bills for businesses, the German central bank estimates in its monthly bulletin published on Monday.
The “signs of recession are increasing” for the German economy and are mainly due to the “general conditions of economic supply – in particular energy supply – which have deteriorated considerably as a result of the war of “Russian aggression against Ukraine” , indicates the monetary institute in a note with a pessimistic tone.
Inflation continues to rise -almost 8% in August- and uncertainty about energy supply and its costs will affect “energy-intensive” sectors that depend in particular on gas, harming their exports and investments, “but also consumption private sector and the service providers that depend on it”, explains the “Buba”.
Recession “possible” at the end of the year
Before the arrest of Russian gas livraisons in Germany, dont le pays depended on 55% before the war in Ukraine, the situation of the appropriation for fossil energy “will be extremely tendue dans les mois à ven” she. So much so that after its modest advance of 0.1% in the second quarter, the GDP should “decrease significantly in the fourth quarter” and “probably in the first quarter of next year”, according to the monetary institute that does not advance any exact numbers We speak of a technical recession in the case of two quarters in a row in decline.
The president of the influential German central bank, Joachim Nagel, had issued a similar forecast at the beginning of September, judging “possible” an entry into recession at the end of this year and the beginning of 2023, a certain number of elements “inclining according to him by this scenario.
One of the main German economic institutes, the Munich IFO, indicated last week that it expects a technical recession in the first quarter of 2023, with a drop of 0.4% in GDP, after an expected drop of 0.2% in the fourth quarter of 2023. 2022.
Source: BFM TV
