Low River Levels Hamper German Economic Recovery
The central bank said limited river transport and higher shipping costs are likely to curb industrial output and export growth, with cargo payloads cut to 20% of normal.
- On Thursday, the Bundesbank reported that depleted German rivers are disrupting goods transport across Europe's largest economy, hampering an already timid economic recovery.
- The Rhine River reached record lows this year near Kaub, Germany, reducing cargo ship payloads to 20% of normal by early August.
- Limited transport routes and sharply rising costs are likely to significantly impair industrial production and export growth, the Bundesbank added in its monthly report.
- German inflation stood at 2.8% in July and could temporarily rise further, the central bank noted, though the outlook depends on the Middle East war.
- Ongoing dry weather risks curbing German economic growth, as the Bundesbank cautions that low water levels are noticeably impacting overall economic activity in the third quarter.
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As a result of low water, the Bundesbank anticipates a temporary slowdown in the economy.
The historical drought in Central and Northern Europe threatens Germany’s recovery in the third quarter of the year. The warning has been launched by the central bank of the largest European economy, the Bundesbank, in its August economic bulletin. The entity fears that the fall in the water flow of Germany’s major rivers may “temporarily slow” the country’s recovery, which has not ended since the Russian invasion of Ukraine.
Low River Levels Hamper German Economic Recovery
The Bundesbank reports that depleted German rivers are hindering goods transport, affecting Europe's biggest economy. Droughts have reduced river levels, increasing transport costs and slowing industry recovery. The limited routes impact production, exports, and economic activity. Inflation concerns persist, influenced by interest rates and geopolitical tensions.
The record low water has not only consequences for nature. The economy also suffers massively. Ship transport is hardly possible anymore, freight has to evade by rail and road. The Bundesbank warns against burdens - especially now that the economy had just begun to step back.
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