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Germany's central bank warns of another GDP contraction in Q3

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Germany's central bank warns of another GDP contraction in Q3

Deutsche Bundesbank said Germany’s economic output may have slightly declined again in the third quarter amid a continued slump in the country's export-oriented industry, Reuters reported Oct. 21, citing the central bank's latest monthly report.

The central bank said early economic indicators show "few signs of a sustainable recovery" in the exports sector, the slowdown of which could affect the rest of the economy.

"This raises the risk that the slowdown extends to a greater extent to more domestically oriented sectors," Bundesbank was quoted as saying by Reuters.

Bundesbank, however, said it was not expecting a recession, echoing the sentiment of the German government that the country was not facing an economic crisis. Germany's economic ministry had earlier lowered its GDP growth forecast for 2020 to 1% from 1.5%, while maintaining its projection of a 0.5% expansion for 2019.

The German economy contracted 0.1% in the second quarter of 2019 amid the sharpest year-over-year fall in exports in six years.