FRANKFURT (Reuters) - The German economy may have contracted in the three months to September, and a slowdown in exports is now threatening to affect the domestic economy as well, the Bundesbank said on Monday.
The euro zone’s largest economy has slowed sharply in the past year as its traditional engine of growth - exports - bore the brunt of a global trade war.
“Germany’s economic output could have shrunk again slightly in the third quarter of 2019,” the country’s central bank said in a monthly report. “The decisive factor here is the continued downturn in the export-oriented industry.”
This downturn was starting to cast a shadow on the rest of economy, the Bundesbank said, adding however that it did not expect an outright recession.
“Early indicators currently provide few signs of a sustainable recovery in exports and a stabilization of the industry,” the central bank said.
“This raises the risk that the slowdown extends to a greater extent to more domestically oriented sectors.”
Reporting by Francesco Canepa; Editing by Hugh Lawson