German economic output is likely to have gone up slightly again in the second quarter of 2023, according to the Monthly Report. Private consumption has stabilised after previously having fallen. According to the experts, the fact that the labour market remained in good shape, wages rose sharply and price inflation did not continue to accelerate contributed to this development. Meanwhile, the decline in foreign demand was a drag on industry and the rise in funding costs dampened domestic investment. The Bundesbank is expecting the economy to recover haltingly later in the year.

Vice-President Claudia M. Buch points out that an unexpected economic downturn could be amplified if the banking sector deleverages to maintain capital ratios. Hence, “banks must maintain capital buffers designed to absorb losses and thereby stabilizing lending”, Buch stated at an event in Dublin. 

Cash is a quick and cheap means of payment in the German retail trade sector. On average, cash payments take just over 22 seconds and cost around 24 cent per transaction, according to a study on the costs of cash payments in the retail trade sector which the Deutsche Bundesbank carried out in cooperation with EHI Retail Institute.

Bundesbank President Jens Weidmann has conflicting views on the United States’ decision to initially exempt the European Union from the recently enacted tariffs on steel and aluminium. Though it avoided an open trade conflict, the agreement reached between the United States and the EU was no victory for international free trade, Mr Weidmann explained during a speech in Vienna.