According to the Bundesbank, the usual spring upswing in the German economy will fall through this time because of the consequences of the Russian war against Ukraine.
"In the second quarter of 2022, German economic output should at best increase slightly from today's perspective," says the monthly report published on Monday.
"Headwinds are coming in particular from high inflation, delivery bottlenecks, high levels of uncertainty and weaker foreign demand."
The negative effects of the aftermath of the war are likely to significantly weaken the previously planned strong recovery in Europe's largest economy.
"Private household consumption is being held back by high inflation and uncertainty about how the war will progress," explained the German central bank.
"High energy and material costs and increased uncertainty are also having a negative impact on production in industry and construction."
Due to the Ukraine war and corona-related lockdowns in China, the supply chains are again under heavy strain.
"Exports are also likely to remain significantly below the level of the winter quarter due to the disruption to foreign trade and lower foreign demand as a result of the effects of the war," it said.
Losses could increase
Because of the war in Ukraine, industrial companies surveyed by the Bundesbank in March are assuming that production losses will increase in the second quarter and that the problems in the supply chains will peak at the same time.
After that, the expected production losses should gradually subside.
"However, even in 2024, companies still expect noticeable production losses due to supply bottlenecks," according to the Bundesbank.
In the first quarter, the German economy grew by 0.2 percent.
In its spring forecast, the federal government only expects economic growth of 2.2 percent for 2022 as a whole.
In January, the traffic light coalition had estimated an increase of 3.6 percent.