Bundesbank: Germany faces recession, double-digit inflation

Germany is heading into recession as inflation is set to top the 10-percent mark, the Bundesbank said in its monthly report on Monday.

"There are mounting signs of a recession in the German economy in the sense of a clear, broad-based and prolonged decline in economic output," the report said.

The central bank projects a moderate contraction for the current quarter and more pronounced declines in activity in the final quarter of this year and the first quarter of next year. The report also says inflation will continue to accelerate further and reach double digits in the coming months.

"High inflation and uncertainty with regard to energy supply and its costs affect not only the gas and electricity-intensive industry and its export business and investments, but also private consumption and the service providers dependent on it," the central bank said.