Bundesbank Urges Economic Revamp as German Economy Shrinks

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Germany’s economy will probably shrink this quarter and officials must address a range of deep-seated challenges to the country’s business model if they’re to boost the longer-term outlook, according to the Bundesbank.

Despite slowing inflation, robust wage growth and a solid labor market, consumers are hesitant to spend, the central bank said. Meanwhile, manufacturing weakness is intensifying and higher financing costs may be worsening strains on domestic and foreign demand.

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