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June 26, 2022
BUSINESS

Germany’s growth forecast cut by Bundesbank

Germany’s central bank, the Bundesbank, has cut its growth forecast for next year, saying the country’s economy might be entering a recession, the BBC informs. Growth in 2013 is now expected to be just 0.4%, compared with a forecast in June of 1.6%, but is expected to bounce back to 1.9% in 2014. Meanwhile, industrial output fell a steeper-than-expected 2.6% in October. It comes one day after European Central Bank president Mario Draghi cut his forecast for eurozone growth. Draghi blamed his move on a stagnation in core eurozone countries, including Germany, France and the Netherlands. Southern European countries, such as Spain and Italy, have been in recession for more than a year, but the malaise has spread to the rest of the single currency zone via weak export demand and falling consumer and business confidence. Meanwhile, the ECB’s German counterpart warned that Germany’s economy may suffer a recession during the current quarter and the first three months of next year. The Bundesbank has cut its growth forecast for the current year as a whole to 0.7%, from 1% previously, in light of what is seen to be a very poor performance since the autumn. Industrial production data released on Friday registered a 2.6% drop in output during October, meaning that output in the month was 3.7% lower than a year earlier, with construction activity and demand for investment goods particularly badly affected.

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