Summary

The Bundesbank added to a growing list of negative indicators this week when it warned that Germany would likely enter recession in the third quarter.

The bank is projecting ‘lackluster’ growth over the current quarter, culminating in what’s expected to be a slight contraction. Since the German economy shrunk by 0.1% in the second quarter, such a result would represent a technical recession, which in and of itself is no cause for serious concern. However, if certain negative trends in global trade patterns persist, then Germany’s export-reliant economy could be in for a bumpy ride for the foreseeable future.