The Bundesbank predicts that economic weakness will persist into the fourth quarter, with ongoing challenges such as a slowdown in China's growth and rising corporate bankruptcies.

Overall, the outlook remains bleak, with analysts warning of a potential 'winter recession' as economic conditions continue to deteriorate.

Inflation rates rose to 2.0% in October 2024, influenced by previous declines in energy and travel prices.

Despite these challenges, consumer spending increased by 0.3% in the summer, driven by rising wages and government expenditures.

This increase in consumer spending has temporarily shielded the economy from slipping into a technical recession.

This follows a contraction of 0.3% in the second quarter, indicating persistent economic struggles.

The German economy grew by a modest 0.1% in the third quarter of 2024, a downward revision from the previously estimated 0.2%.

The government forecasts a GDP contraction of 0.2% for the year, marking a second consecutive year of recession, but anticipates a recovery with 1.1% growth in 2025.

Political uncertainties, including Donald Trump's election victory in the U.S. and the collapse of Germany's governing coalition, have heightened economic risks and reduced forecasts.

These concerns are compounded by international factors, such as potential U.S. tariffs and domestic instability.

High energy prices and bureaucratic hurdles are further straining Germany's industrial competitiveness, particularly affecting exports.

The industrial sector is under significant pressure, with key industries like automotive, machinery, and electronics reporting production declines of 6.9%, 8.5%, and 10.7% respectively.