According to the Central bank Monday monthly reports, recession in Germany might be hitting soon and high inflation is expected in 2023. Germany being the largest economy in Europe is moving ahead the slump that may last into next year.
This report said that the signs of recession for the German economy will be multiplying!
Unfavorable developments in the gas market
Germany’s Central bank pointed towards not needed developments in the gas market that started after Russia shuts the Nord Stream gas pipeline. This is how Russia tried to reduce it’s reliance on the Russian energy imports.
Before the war between Russia and Ukraine started, Russia accounted for 55% of Germany’s gas supply. But now the number is reduced while at the same time, German industry has also warned of the gas shortages, leading to production problems.
It’s not the worst yet!
In the previous quarter, German economy managed growing to 0.1%. However, the Central bank economist expects a slight contraction in the current quarter, marking greater decline in the economic output. The central bank has warned about the high-inflation in the country to double digits in coming months. It has also made clear about the rises in prices of services and energy!