Downward revision to German growth raises fears of recession Frederick Valdez April 27, 2022 Recession Risk 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 euro zone 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. Related posts: How to invest now and 3 recession signals to watch out for: Adam Parker With rising rates and disappointing fixed income, this strategy could prove useful Economic recovery and return of inflation Is Australia heading for a recession and 5% interest rates… and can Musk save Twitter, while Macron reunites France?
