The German Central Bank reveals the reasons for the economic decline in Germany
Estimates of the German Central Bank revealed that the decline in consumption and weak demand hindered the country’s economy in the third quarter of this year.
According to the monthly report issued last week, it was stated that the real GDP is likely to contract somewhat in the third quarter of 2023.
The German Central Bank stated, in its report, that the continued weakness of demand from abroad for industrial products bearing the slogan “Made in Germany” was one of the factors that affected the performance of the German economy in the third quarter, as International Monetary Fund estimates indicate that the global economy is recovering from the repercussions of the Covid pandemic, the Russian war on Ukraine, and high inflation, which is moving at a slow pace, which significantly affects the German economy, which depends on exports.
The German Central Bank’s experts pointed out in the report that weak real revenues in the retail trade sector and the hospitality sector are examples that indicate a continued decline in consumption.
On the other hand, the German Central Bank pointed to factors that helped the economy in that period, which were the continued recovery of the labor market and strong wage increases with the decline in the pace of inflation.
However, families haven’t yet exploited the additional spending potential to increase consumption expenses.
The inflation rate in Germany declined from 6.1% last August to 4.5% last September, but the continued strong rise in food prices above average was at the forefront of the factors causing difficulties for consumers.
Next Monday, the German Federal Statistical Office is expected to announce its preliminary estimates of the performance of the largest economy in Europe in the third quarter of this year.
