German wage catch-up continues even as economy shrinks, Bundesbank says

FRANKFURT (Reuters) -German wages are continuing to grow briskly despite a shrinking economy as workers regain more of the purchasing power they lost to high inflation, the country’s central bank said on Thursday.

The German economy, Europe’s largest, has barely grown in two years, hit by a surge in energy costs following Russia’s invasion of Ukraine, weaker global demand and tough competition from China in the car and solar energy sectors.

But its labour market, particularly in services, remains tight and workers are still in the…