The German central bank said in a monthly economic report on Monday that German growth will recover after the weak third quarter as the economy works through issues that have declined during the summer months.
The GDP of the euro zone's largest economy fell 0.2% in the fourth quarter of last year due to a decline caused by the weakening of the auto industry, which struggled to adapt to new emissions testing requirements.
"By the end of the year, the German economy is likely to expand strongly again," the central bank said. "The overall economic production capacity will continue to be well above average."
Employment growth was strong and demand for labor remained high, even though the economy was already suffering from a lack of employment, which led to higher wages.
However, global growth seems to have slowed, the central bank added, noting that developed economies in particular have lost momentum.
