The German economy is expected to grow less than expected this quarter and could face a new spike in inflation in September as government subsidies expire, the country’s central bank said on Friday.
Europe’s industrial power is grappling with rising energy bills as Russia cuts its gas supplies in retaliation for sanctions over its invasion of Ukraine.
“This is also hurting the outlook,” the Bundesbank said in its monthly report, adding that third-quarter growth could fall short of the June forecast, which is not made public.
Its forecast for the whole of 2022 is for a 1.9% increase in Gross Domestic Product.
The German central bank projects that inflation, which hit 8.2% in June, will remain high in the coming months and even pick up in September, when government subsidies for fuel and rail tickets expire on August 31.
“The future development of the energy market is very uncertain, especially with regard to deliveries of Russian natural gas,” the Bundesbank said. “Risks to the price outlook are clearly pointing up.”
The European Central Bank raised interest rates for the first time in 11 years on Thursday, seeking to combat record inflation.
Source: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
