The German economy is seen as likely to shrink further this quarter and recovery is seen as difficult, although there are some signs that an improvement could happen early next year, the Bundesbank said in its monthly economic report on Monday.
A deep recession in the industrial sector, Germany has been among the weakest economies in Europe this year as high energy costs, weak global orders, and higher interest rates take their toll.
"Economic growth is likely to again slow slightly in the fourth quarter of 2023," the Bundesbank said of the economy of Europe's largest country.
Germany recorded quarterly growth in the economy only once this year. However, the central bank remains optimistic about the year ahead, following high employment rates, strong wage growth, and stable sentiment indicators.
Meanwhile, Germany's central bank also warned that there was no evidence of a sustained pick-up in global industrial activity, with studies showing a decline in new orders and overall weak demand.
