German economy may have contracted again in third quarter

Bundesbank however says deep recession is not on the cards

A German flag flies in front of the Bundesbank headquarters in Frankfurt, Germany . Photographer: Ralph Orlowski/Bloomberg

A German flag flies in front of the Bundesbank headquarters in Frankfurt, Germany . Photographer: Ralph Orlowski/Bloomberg

 

Germany’s Bundesbank says the economy might have contracted again in the third quarter, but a deep recession isn’t in the cards. While export-oriented industries continue to suffer and confidence indicators don’t suggest an immediate turnaround, sectors targeted toward domestic demand are still doing well, according to the institution’s monthly report.

Yet risks are increasing that weaknesses will spill over. “German economic output could have shrunk slightly again in the third quarter of 2019,” the Bundesbank said. “A recession in the sense of a significant, broader and longer-lasting decline in output with underutilised capacity is currently not in view.” - Bloomberg