German central bank warns technical recession possible in 2023 amid strikes, but says it would likely be mild and short

The German central bank warned that a technical recession is possible by end of Q1 2024 due to recent strikes impacting infrastructure.

GDP contracted 0.3% year-on-year in Q4 2023 and declined over the entire 2023 year. Two consecutive quarters of decline means a technical recession.

The bank said the potential recession would likely be short-lived and shallow. Personal finances are improving for many Germans.

Inflation is falling, nearing the 2% target again. But consumers may still spend cautiously due to recent strains.

Business leaders called on the government to commit to more public investment to spur economic activity, with infrastructure, digitalization and education priorities.