In the final quarter of 2022, real gross domestic product is likely to have more or less stagnated, and thus exceeded previous expectations,” the Monthly Report states. Although high inflation and uncertainty surrounding the war in Ukraine weighed on the economy, the situation in the energy markets eased markedly compared with the third quarter. This, coupled with the government covering advance payments for gas bills, led to a distinct weakening in consumer price dynamics in December. However, prices for non-energy components such as food and industrial goods continued to increase sharply, according to the report.

The Bundesbank’s experts see mounting signs of the German economy sliding into a recession. According to the current issue of the Bundesbank’s Monthly Report, economic output is likely to decline somewhat in the current quarter and to shrink significantly in the final quarter of 2022 and the first quarter of 2023. The economists put this largely down to the extremely tight energy supply situation.

“The recovery of the German economy, which began in spring, continued at a faster pace in the third quarter of 2021,” the Bundesbank writes in its Monthly Report. Particularly strong growth was reported for private consumption and services. Supply-side constraints persisted in industry, however, so that output continued to lag considerably behind strong demand.

According to the current issue of the Monthly Report, there is likely to be a steep fall in German economic output in the first quarter of 2021. In particular, activity in services sectors with high frequencies of interpersonal contact will probably have declined again sharply. By contrast, industry is profiting from stronger foreign demand and is likely to have bolstered economic activity in the current quarter.

Economic output in Germany declined in the first quarter of this year, according to the latest edition of the Bundesbank’s Monthly Report. Many services sectors suffered larger losses than in the previous quarter due to containment measures being tightened and prolonged. In addition, the upturn in industrial output was not sustained in the first two months.

Economic output in Germany could have contracted again slightly in the third quarter of 2019 compared with the second quarter. According to the Bundesbank’s latest Monthly Report, this is due to continued weakness in export-based industry. By contrast, the domestic economy continued to provide impetus.

The German economy grew moderately in the first quarter of 2019. However, in the Bundesbank’s assessment, the still positive development was largely attributable to one-off effects. The Bundesbank's economists write that the already booming construction sector profited further from the favourable weather in February, for example.