Germany's central bank, the Bundesbank, on Monday said it does not see signs of a summer recovery after Europe's largest economy shrank in the second quarter of this year.
Germany's economy contracted 0.1 per cent in the April-June period, according to preliminary figures from the country's statistical agency Destatis released last week. Another quarter of contraction in the summer months would technically put Germany into recession.
"The total economic output could fall again slightly," the Bundesbank said of the July-September period in its monthly report released Monday.
Key to the ongoing weakness is poor exports and a continuing decline in industrial production, the Bundesbank said, while consumer spending and construction have helped to prop up the economy.
The central bank said it remained to be seen whether exports and manufacturing catch themselves in time before dragging domestic indicators like employment and consumer spending down with them.
A slowing global economy and uncertainties over a trade conflict between the United States and China, as well as Brexit, have impacted Germany's export-dependent industry. Structural changes in the car industry as it transitions to electric engines has also been a burden.
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