Bundesbank predicts stagnation of the German economy in the second quarter


The Bundesbank published a monthly report in which it set forth a new assessment of Europe’s largest economy. The Central Bank expects that in the second quarter Germany may experience stagnation amid a weakening manufacturing sector, which will be caused by a decrease in external demand. According to the regulator, the German economy in the first quarter showed growth due to such one-off factors as government stimulation, a temporary recovery in demand for cars and good weather conditions. In the second quarter, the bank expects downward pressure in industry against the background of growing tension in trade relations between the US and China, as well as in connection with the possible imposition of US import duties on German cars. At the same time, industrial sectors oriented towards the domestic market will show growth against the background of a strong labor market and low interest rates.

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