(Bloomberg) -- Germany’s economy is faring worse than predicted last month and its rebound will probably be delayed, according to the Bundesbank.

“The economy is currently slightly weaker than expected in the December projection,” the central bank warned Friday in its monthly report. “Signs that industrial foreign demand had already reached its lowest point weren’t confirmed.”

Even if the situation around household income is improving, output may “stagnate at best” in the first quarter, it said. “This would delay the recovery expected in the December projection,” in which the Bundesbank saw 0.4% growth in 2024 with expansion beginning early in the year.

The subdued outlook keeps alive the risk that Germany will fall into the recession that it’s so far just managed to avoid. Gross domestic product probably fall 0.3% in the final three months of last year, with the Bundesbank citing a continued decline in foreign orders, uncertainty about fiscal policy and cautious consumers.

Indicators this week confirmed that a rebound has yet to take hold. Germany’s business outlook unexpectedly soured in January, according to the Ifo institute, while surveys of purchasing managers showed last year’s downturn continuing at a slightly steeper pace.

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