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Bundesbank warns river low water may hit Germany’s Q3 growth

The Bundesbank links low Rhine and other river levels to higher shipping costs and slower cargo transport, while saying second round wage inflation effects have not yet appeared.

Reported · Written up by our desk · Economy

German central bank the Bundesbank said poor weather has hampered the country’s economic recovery, pointing specifically to low water levels that have limited usable transport routes on major rivers and are weighing on activity in the third quarter, according to Forexlive.

In its latest assessment, the Bundesbank said shallow Rhine water has prevented some vessels from sailing fully loaded, increasing shipping costs and slowing cargo transport, which it expects to impair industrial output and export growth.

The Bundesbank also tied weaker sentiment for corporate investment to ECB rate hikes, while noting inflation could rise temporarily due to external pressures from the Middle East conflict.

Even so, the Bundesbank said it sees hope that Germany could still post slight growth in the quarter at best, and it said there is no evidence yet of second round inflation effects through wages, though it expects the ECB to likely raise interest rates again in September.

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