Germany’s Q2 Economic Outlook: Inflation Rises, Growth Stagnates Amid Iran War
Bundesbank Report Highlights Economic Challenges in Germany
Inflation Trends and Projections
FRANKFURT, May 21 (Reuters) - Inflation in Germany is trending upwards and economic growth will likely be flat during the second quarter, hit by rising fuel expenses and uncertainty due to the Iran war, the Bundesbank said on Thursday.
Short-Term Inflation Outlook
• "The inflation rate is likely to remain high in the coming months," the Bundesbank said in a monthly report, adding that the rate could rise further in Europe's largest economy, depending on further developments in the Middle East
Economic Growth and Stagnation Factors
Impact of Energy Prices on Growth
• The economy will likely stagnate in the second quarter, as higher energy prices weigh on demand by private households and on companies' investment and production plans
Recent Inflation Data
• German inflation rose to 2.9% in April, from 2.8% in March, according to preliminary data from last month, largely driven by a spike in oil and gas prices
Ministry Warnings and Future Outlook
• The federal economy ministry warned last week that economic growth in Germany, which was just 0.3% in the first quarter, will likely take a significant hit from the effects of the Iran war in the second quarter
(Reporting by Ludwig Burger and Rene Wagner; editing by Matthias Williams)
