FRANKFURT: German output is likely to shrink slightly in the first quarter, sending Europe’s top economy into recession as it battles multiple crises, the country’s central bank warned Monday.
The German economy has been struggling since Russia’s 2022 invasion of Ukraine sent inflation soaring, with the crisis compounded by an industrial slowdown and weakness in key trading partners.
After contracting 0.3 percent in the final quarter of 2023, output is “likely to once again decline slightly” from January to March, the Bundesbank said in its monthly report.
“This second consecutive decline in economic output would put the German economy into a technical recession.”
The central bank listed a litany of problems facing the export powerhouse, from slowing foreign demand to constrained consumer spending and domestic investment. The economy may also be impacted by a wave of recent strikes, particularly those in the rail and aviation sectors, it said.
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