- The German economy persists in confronting challenging circumstances, as per the Bundesbank.
The German economy, as per the Bundesbank's analysis, will carry on showing moderate growth in the forthcoming months. The predicted gradual upturn of the economy is expected to be postponed further, according to the monthly release published on Tuesday. Multiple factors contribute to this, including subpar export numbers, causing the Bundesbank analysts to predict a minimal boost in economic expansion.
The Bundesbank continues to project a weak economy, but it doesn't foresee a severe and prolonged economic downturn - as long as no unexpected negative factors emerge, the monthly report mentions. Domestic consumption and the service sector are apparently poised to underpin the ECONOMY.
However, the Bundesbank experts also highlight that consumers remain "unconvinced". This implies that substantial salary hikes have yet to spark a sustained boost in consumer expenditure.
The industry is anticipated to continue slowing the overall economic progression in the coming months. "In essence, the German manufacturing sector might remain weak during the third quarter," the Bundesbank analysts note. Nevertheless, a recent surge in orders appears to offer a glimmer of optimism.
Despite the relatively weak economy, the Bundesbank does not predict a substantial decrease in inflation. Instead, the reduction in inflation rates in advanced economies is progressing at a moderate pace. "Returning to price stability objectives isn't imminent for the near future," the report notes. In particular, for labor-intensive services, price increases remain persistently high, also due to "robust wage growth".
The current economic situation has led many consumers to closely monitor their spending, resulting in a careful consideration of the [Price] of various goods and services. Despite the recent surge in orders, the manufacturing sector may still face challenges, impacting the overall [Price] dynamics in the German economy.
