A man fuels a vehicle up at a gas station in Berlin, Germany, Sept. 5, 2022. (Xinhua/Ren Pengfei)
The institution's economic researchers expect the German economy to shrink markedly in the fourth quarter of this year and the first quarter of 2023.
FRANKFURT, Sept. 19 (Xinhua) -- With energy prices through the roof, inflation in Germany could exceed 10 percent this year with the economy heading into recession, the country's central bank (Bundesbank) said in a report on Monday.
"There are increasing signs of a recession of the German economy in the sense of a clear, broad-based and prolonged decline in economic output," the bank's monthly report said.
The institution's economic researchers expect the German economy to shrink markedly in the fourth quarter of this year and the first quarter of 2023.
Customers shop at a supermarket in Frankfurt, Germany, on Aug. 1, 2022. (Xinhua/Shan Weiyi)
High inflation has been the main driver of the economic downturn. The surging energy prices are weighing on the country's energy-intensive industries, eroding private consumption and affecting service providers, the report said.
In August, Germany's inflation rate rebounded to 7.9 percent after falling for two consecutive months as a result of the inflation relief measures imposed by the federal government.
Since the relief measures expired at the end of August, inflation is expected to rise in September, the central bank said, adding that the rate is likely to remain double-digit in the next few months.
People stand in front of the Euro sculpture in Frankfurt, Germany, on Aug. 22, 2022. (Xinhua/Shan Weiyi)
Germany's gross domestic product (GDP) grew by 1.5 percent year-on-year in the second quarter of 2022.
To reduce inflation in the eurozone, the European Central Bank (ECB) has already increased its key interest rates twice this year, with further hikes likely. ■
