Economists warn of growing recession risks in Germany

The chances of Germany slipping into a recession before the end of April are rising, according to a report by economists from the Hans Böckler Foundation on Monday, reported dpa.

The growing prospects of a recession are mainly due to falling production in Germany's manufacturing sector, according to the latest data through December from the foundation's Macroeconomic Policy Institute (IMK).

The researchers see further negative factors in recent weak retail sales as well as an above-average number of bankruptcy filings by German companies compared to before the pandemic.

Rising industrial orders improved the outlook somewhat but should not be overestimated, according to IMK economist Thomas Theobald.

The uptick is mainly due to large orders in aircraft construction, which are not as indicative of underlying economic momentum, he said.

"With each passing month, the risk grows that the economic slump we have been experiencing for several quarters will turn into chronic weak growth," IMK Director Sebastian Dullien said in a press release.

Dullien urged action by the European Central Bank (ECB) and the German government to counter the trend: "The ECB should cut interest rates as soon as possible. And German politicians should introduce realistic measures that take effect quickly."