(Bloomberg) -- The Bundesbank doesn’t see Germany suffering a severe economic slump – despite a surprise contraction in the second quarter.
“From today’s perspective, a recession in the sense of a significant, broad-based and long-lasting decline in economic output isn’t to be expected as long as no new negative shocks occur,” the Bundesbank said Tuesday in its monthly report.
It forecast that output will “increase slightly” in the third quarter — although “this means that the expected slow economic recovery will be further delayed.”
Gross domestic product in Germany unexpectedly dropped by 0.1% between April and June — adding to concerns that Europe’s largest economy will struggle to overcome its recent weakness or that it could even slip into a recession.
The country faces the prospect of hardly any growth at all this year, according to analysts polled by Bloomberg.
The Bundesbank sees an increased likelihood of the second quarter’s preliminary GDP reading being revised, citing in a lag in receiving important numbers for trade and services.
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