Germany faces the risk of recession.

(HNMO) – Investor confidence in Germany has fallen for the third consecutive month amid declining growth prospects, putting the European Union's largest economy at risk of recession.

The German economic sentiment index, measured by the ZEW economic research institute, fell from 4.1 in April to -10.7 in May. This marks the first time the index has dropped below zero in 2023.

The aforementioned data was released amid a deeper-than-expected decline in manufacturing activity across most industries in Germany. In March, new orders for manufacturing companies fell by 10.7% compared to the previous month, the sharpest drop since April 2020.

The German economy could fall into recession. Photo: Reuters.

According to ZEW Chairman Achim Wambach, financial market experts predict that the already unfavorable economic situation will worsen over the next six months. This prospect could lead to a mild recession in the German economy.

Meanwhile, economists predict that German industry will stagnate rather than recover as expected, thereby diminishing the country's economic recovery prospects.

Earlier, in a report published on May 16, the International Monetary Fund (IMF) warned that tighter financial conditions and the shock of rising energy prices had begun to affect Germany's growth in the short term.

The IMF also predicts that Germany's gross domestic product (GDP) will be close to zero in 2023, before gradually increasing to 1% to 2% between 2024 and 2026, when the effects of tight monetary policy diminish and the economy adjusts to the energy shock.

Source: https://beta.hanoimoi.com.vn/duc-doi-mat-nguy-co-suy-thoai-441951.html