Germany Facing Double-Dip Recession as Struggling Economy Expected to Plummet Again
TEHRAN (FNA)- Germany's economy is expected to shrink again this quarter, facing challenges in its recovery, according to a monthly economic report from the Bundesbank on Monday.
The eurozone's largest economy has struggled this year due to factors such as high energy costs, weak global orders, and higher interest rates, leading to a deep industrial recession, The Express reported.
The Bundesbank said that economic output is likely to decline in the fourth quarter of 2023, and the German economy will face a tough recovery from the ongoing weakness since the start of the conflict in Ukraine.
Germany experienced economic growth only once this year, and indicators for the final three months of the year have generally been worse than expected.
"The economic output is likely to once again decline slightly in the fourth quarter of 2023," the Bundesbank said.
"The German economy is set to recover only arduously from the period of weakness that has persisted since the outbreak of the war against Ukraine," it added.
Despite these challenges, the central bank expressed cautious optimism for the coming year. It highlighted factors such as high employment, strong wage growth, and stabilising sentiment indicators.
The Bundesbank mentioned possible signs of a slight improvement after the new year, with indications that foreign demand may have reached its lowest point.
However, the report also issued a warning, stating that there is no evidence of a sustained improvement in global industrial activity.
Surveys indicate a decline in new orders and overall weak demand, suggesting that challenges persist in the broader economic environment.
"Tentative signs of a slight improvement after the turn of the year are beginning to emerge," the Bundesbank said, adding, "The underlying trend in new orders suggests that foreign demand may have bottomed out."