BERLIN (Reuters) – Germany’s recession is likely to end in the second quarter, the Bundesbank said in its monthly report on Monday, adding that gross domestic product would rise slightly over the April-June period.
“Private consumption is expected to bottom out before picking up again,” the experts at the German central bank wrote. “Thanks to the sharp increase in wages, household disposable income is stabilizing despite inflation that remains very high.”
Germany entered a technical recession at the start of the year, after a decline in GDP in the fourth quarter of 2022 (-0.5%) and the first quarter of 2023 (-0.3%).
The Bundesbank said the spring quarter rally would hinge on the ability of German industry to overcome the continued decline in demand on the back of lower energy prices, reduced bottlenecks and rebuilding order books.
The German central bank forecasts a contraction of 0.3% in annual GDP in data adjusted for calendar effects, then growth of 1.2% in 2024 and 1.3% in 2025.
“The German economy is therefore only recovering laboriously from the crises of the last three years,” added the institution.
(Rene Wagner, written by Friederike Heine, Laetitia Volga, edited by Kate Entringer)
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