Bundesbank said in the monthly report that for Q1, there are “no signs of a fundamental change in Germany’s economy”. Domestic demand and construction are expected to continue to support the economy as a whole. Manufacturing will remain a drag even though the contraction is starting to ease.

However, it warned that “with the appearance of the coronavirus in China at the beginning of 2020, a new layer of risk was added.” “A temporary decline in overall demand there could damp German export activity,” the report noted. “Moreover, some global value chains could be impaired by security measures put in place. Delivery bottlenecks in selected industries here would be one consequence.”

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