Current restrictions on public life imposed in Germany to contain the novel coronavirus pandemic will halt economic recovery at least temporarily, the central bank said in Frankfurt on Monday.
Strong economic growth over the summer, following a sharp fall in gross domestic product in the spring, would come to a halt, the Bundesbank predicted in its monthly report. GDP would either stagnate or even decline, it said.
The Federal Statistical Office (Destatis) put GDP growth in the third quarter at up 8.2 per cent on the second quarter. This followed a quarter-on-quarter fall of of 9.7 per cent in the second quarter.
Despite rising numbers of coronavirus infections, the Bundesbank is not expecting a sharp decline in output.
"Taken as a whole, a collapse in economic output to a similarly depressed level as in the spring is not very likely from a current perspective," it said, noting that current restrictions were "by a long way not as comprehensive as in March or April."
Germany's key export sector would continue to feel the impact of the pandemic on its European neighbours, the Bundesbank said, adding that short-time working was likely to rise again after easing in September and October.
Turning to the sharply rising national deficit, the central bank predicted the situation would improve as the crisis faded. "From the current perspective, the deficit will fall somewhat over the course of next year and decline more clearly in 2022," it said.
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