Real gross domestic product (GDP) is likely to have contracted somewhat in the third quarter of 2023, according to the latest Monthly Report. Weak foreign demand and higher financing costs weighed on the German economy. Tailwinds came from the still robust labour market and steep wage increases amidst subsiding inflation, the economists report.

Der EZB-Rat hat heute beschlossen, die drei Leitzinssätze der EZB unverändert zu belassen. Die neu verfügbaren Daten haben unsere bisherige Einschätzung der mittelfristigen Inflationsaussichten weitgehend bestätigt.

The German economy is set to recover only arduously from the period of weakness that has persisted since the outbreak of Russia’s war against Ukraine, write the Bundesbank’s experts in the Monthly Report. The industrial sector is still up against difficult conditions, and households’ mood for spending remained subdued in the third quarter. The experts do not expect economic output to see slight growth again until the first quarter of 2024.