Recession and double-digit inflation in Germany

WBecause of the energy crisis, the Bundesbank is expecting a noticeable economic downturn and around 10 percent inflation. "There are increasing signs of a recession in the German economy in the sense of a clear, broad-based and prolonged decline in economic output," the central bank said in its monthly report on Monday. The main reason is the rising energy costs as a result of the Ukraine war.

After the mini-growth of 0.1 percent in spring, gross domestic product is expected to shrink somewhat in the current summer quarter. "All in all, economic output is likely to decline noticeably in the fourth quarter," emphasized the Bundesbank's experts. "This should probably also apply to the first quarter of the coming year." The outlook is extremely uncertain.

"The high inflation and the uncertainty with regard to the energy supply and its costs not only affect the gas and electricity-intensive industry and its export business and investments," it said. Because private consumption and the service providers dependent on it are also affected.

Setback for the hospitality industry

The German hospitality industry already started the second half of the year with a setback. Hotels, restaurants and pubs counted 0.4 percent more in their tills in July than in the previous month, like that Federal Statistical Office communicated. However, excluding rising prices, real sales fell by 1.5 percent.

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