Germany's central bank - Bundesbank - noted in its latest monthly report that the domestic economy is currently slightly weaker than expected in its December projections and could at best stagnate in the first quarter of 2024. The central bank also said it expects the inflation in Germany will decline noticeably at the start of the year, primarily on base effects.
In addition, Bundesbank pointed out that consumers remain cautious in spending, foreign demand is weak, higher borrowing costs are dampening investments, and uncertainty about future fiscal policy is weighing on overall activity.