In its latest monthly report, Bundesbank acknowledged that the “weak phase” in the German economy since Russian war of aggression against Ukraine would continue.
Despite this, it stops short of predicting a recession, defining it as a “significant, broad-based and long-lasting decline in economic output.”
The report further elaborates, indicating “no signs of an impending noticeable deterioration” in the labor market stemming from the current economic slowdown.
On the inflation front, Bundesbank anticipates continued decline in inflation rates in the coming months, with price pressures on food and other goods expected to ease further. Nonetheless, the report signals slower pace of decline in service sector inflation, attributing this trend partly to “continued strong wage growth.”
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