Home Economy Germany GDP Likely To Fall; Inflation To Peak Above 10% In Autumn: Bundesbank

Germany GDP Likely To Fall; Inflation To Peak Above 10% In Autumn: Bundesbank

by Renju Jaya

The likelihood of the German economy contracting in the coming winter has increased significantly due to gas shortages, Bundesbank said in its monthly report on Monday.

Economic output remained flat in the second quarter and GDP is likely to stagnate again in the summer quarter, the central bank said.

In the second quarter, the economy was primarily supported by private consumption. However, the high price increases further reduce the purchasing power of private households, the bank noted. In addition, concerns about an impending gas shortage in winter weigh on the mood to buy.

Bundesbank experts expect the inflation rate to reach new highs in the autumn. Overall, the inflation rate could reach above 10 percent in the fall.

However, the outlook for inflation remains extremely uncertain, primarily due to the unclear situation on the commodity markets, the bank said. The Bundesbank observed that the price risks are still pointing upwards.

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