© Reuters. The German central bank sees signs of economic stagnation multiplying in the midst of the energy crisis
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The Bundesbank said Europe’s largest economy is increasingly likely to contract for a “prolonged period” under the pressure of Moscow’s cuts in energy supplies to the continent.
In its monthly report released Monday, the bank said signs of stagnation in the German economy are multiplying, warning of a widespread and long-term decline in economic output.
He expected a slight contraction of the economy in the third quarter of this year, before there was a notable decline in the last three months of 2022 and early 2023.
The German central bank also predicted that the country could avoid official fuel rationing in the coming months, but saw that the necessary reductions in consumption will push companies to reduce or temporarily stop production.
However, he made it clear that the impact of this is unlikely to be as severe as the bank’s scenario outlined in June, when it predicted the economy will contract 3.2% in 2023.
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