Contrary to expectations, German economic activity expanded in the third quarter of 2022, the Bundesbank writes in its current Monthly Report. Despite high inflation and uncertainty about future energy supply, real gross domestic product surpassed its pre-pandemic level for the first time. However, the Bundesbank’s experts believe that downward forces are likely to clearly predominate in the coming months. They still expect the German economy to enter a recession in the final quarter of 2022 and the first quarter of 2023, though the scale of the recession is extremely uncertain. “Double-digit inflation could even persist into the new year,” the report states.

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.

In the second quarter of 2023, households’ financial assets grew by €94 billion, standing at €7,492 billion at the quarter’s end. Following a significant decline in the previous year, this was already the third consecutive quarter-on-quarter increase. Over the second quarter of 2023, households increased their claims by €59 billion and recorded valuation gains of €36 billion.