Bundesbank’s latest monthly report suggests that Germany’s economic activity is set to decline in the current quarter, though the contraction is anticipated to be smaller than the -0.4% qoq witnessed in Q4 2022.
Despite the downturn, employment leading indicators remained largely stable in positive territory in February, which bodes well for a continued positive development in employment over the coming months.
Inflation in Germany rose slightly to 9.3% in February 2023, up 0.1 percentage points from January. Meanwhile, the core inflation rate increased by 0.3 percentage points to 5.4%, matching the historical high set in December 2022.
Bundesbank predicts a significant drop in the headline inflation rate for March, primarily attributed to the base effect in energy prices. However, the report said, “the core rate is proving to be extraordinarily persistent”.
