FRANKFURT (Reuters) - German growth will rebound after a poor third quarter as the economy works through one-off issues that held it back through the summer months, the Bundesbank said in a monthly economic report on Monday.
The GDP of the euro zone's biggest economy dropped by 0.2 percent last quarter with the fall due almost entirely to weakness in the car industry, which struggled to adjust to new emission testing requirements.
"By the end of the year, the German economy is likely to expand quite strongly again," the Bundesbank said. "Overall economic production capacity will continue to be utilized far above average."
It added that employment growth is solid and labour demand remains high, even as the economy is already struggling with labour shortages, which has pushed up wages.
Still, global growth appears to have cooled, the Bundesbank added, noting that advanced economies in particular seem to have lost momentum.
(Reporting by Balazs Koranyi; Editing by Richard Balmforth)