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The German economy could struggle to regain momentum as escalating global tensions hit the nation’s growth outlook, the country’s central bank said Monday.
“The economic outlook for the German economy became more cloudy in the middle of the year as a result of the unfavourable international news,” the Bundesbank said in its monthly report.
Data released last week showed Europe’s biggest economy contracted by a surprise 0.2 per cent in the three months ended June compared with the first quarter.
The Frankfurt-based Bundesbank had predicted the second-quarter slowdown but said that this would be followed by a pickup in German economic growth in the coming months.
But in its latest bulletin, the Bundesbank said: “Expectations for a strengthening of economic momentum in the second half of 2014, which underline the spring projections, have been thrown into doubt by current data.” This came in the wake of data released this month showing German factory orders plunging at their fastest rate in nearly three years in June and industrial production rising less than forecast.
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