Downward revision to German growth raises fears of recession Business

Officials expect inflation to average 6.1% over the year, before slowing to 2.8% in 2023.

Joachim Lang, head of the BDI Federation of German Industries, said “a short-term recovery is not in sight.”

He warned that the German economy faces a “twin crisis” from soaring energy prices and lockdowns in China as Beijing’s zero-Covid strategy backfires.

Holger Schmieding, chief economist at Berenberg Bank, said Germany was not yet in recession territory but was suffering from “stagflation”.

He said: “The risk of recession would come into serious play if either of the two things went wrong.

“The first is if the Chinese Covid [lockdown] the situation is getting worse… the other risk of recession is an immediate halt to Russian gas deliveries to Europe.

Surveys of private economists by Bloomberg indicate a 30% chance that Germany will soon enter recession, and 35% for the eurozone as a whole.

Despite plummeting consumer confidence, Mr Schmieding said there was no sign of Germans abandoning plans for summer getaways now that restrictions have eased.

He said: “If it weren’t for this factor of reopening post-Covid and returning to normal behavior, Germany would probably already be in recession.”

French business confidence also plummeted ahead of the recent election, falling to the lowest since 2018.

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This notice was published: 2022-04-27 16:48:32

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