Germany likely in recession led by delayed recovery over weak demand, poor industrial growth: Report
Also Read: Germany deputy foreign minister 'optimistic' about multi-billion dollar submarine deal with India The Bundesbank has also highlighted that Germany is probably in a six-month slump, though it’s made a point of saying a severe downturn is unlikely. The Economy Ministry said most research institutes “expect GDP to fall again in the first quarter of 2024." “Despite positive trends in industrial production, construction and foreign trade at the start of 2024, a noticeable economic recovery isn’t yet in sight," it said in its monthly report.
“This is due to continued weak domestic demand, high financing costs and the still subdued sentiment among private households and companies." Bundesbank's analysis did not point to any meaningful recovery either, suggesting that 2024 will be another weak year for an economy traditionally considered Europe's powerhouse, according to Reuters. "Industry in particular will likely remain in a weak phase," the Bundesbank said.
“No major stimulus is expected from private consumption for the time being either." The new industrial orders remain poor with both domestic and export demand at low levels and only a still relatively high backlog is cushioning the sector. Also Read: Archaeologists discover over 1,500 skeletons at construction site in Germany’s Nuremberg High interest rates are weakening domestic demand, particularly for investments, but uncertainty over major issues, like climate policy, also weigh on investment decisions, the bank added.
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