Bundesbank said in the monthly report that “the German economy should shrink slightly in the spring”, referring to Q2. That’s because “special effects that contributed to a noticeable rise in gross domestic product in the first quarter are either expiring or being reversed.”
The report added that Germany is facing headwinds from trade tensions, Brexit and slowdown in the global economy. These factors are weighing down on the export-led manufacturing sector. Nevertheless, “the buoyant forces underpinning the strong domestic-oriented sectors of the economy remain fundamentally intact”.
Overall, “the dichotomy in the economy will continue.”
