The Strategist

Germany welcomes partial recovery after recession in Q2 2023

07/18/2023 - 10:28

Inflation, according to the Bundesbank, slowed down from 8.7% at the start of the year to 6.4% at the end of the reporting period.

After a six-month recession, the German economy began to partially recover in the second quarter of 2023, Bundesbank stated in its monthly report, which was released on Monday.

German output, according to bank experts, "increased slightly again" in the second quarter. The analysts observe that "[the level of] private consumption, which had previously declined sharply, appears to have stabilized." The authors claim that this occurred because "the labor market situation remained stable, wages rose sharply, and inflation did not accelerate."

The inflation rate decreased from 8.7% at the start of the year to 6.4% at the end of the reporting period, according to the bank. The document's authors claim that they are in support of a partial exit from the recession and the elimination of supply disruptions, which when combined with a significant number of orders "prevented the situation in industrial production and construction" from getting worse.

Experts also forecast that the country’s economic recovery would likely progress less quickly this year than they predicted in June.