The world’s fourth-largest economy remains stuck in the “Twilight Zone,” as one bank put it Monday, when Germany reported GDP figures for Q3.

Output fell slightly versus Q2. The 0.1% drop was actually shallower than economists expected.

Still, the lackluster showing underscored the notion that Germany is mired in a so-called “slowcession” — an interminable malaise characterized by a long-running factory slump and a tepid consumption impulse.

“Today’s numbers will do very little to hush the current debate on whether or not Germany is once again the sick man of Europe,” ING’s Carsten Brzeski remarked. “Since the war in Ukraine started, the German economy has grown in only two quarters,” he added. “Worse, the economy remains hardly above its pre-pandemic level more than three years later.”

The statistics agency on Monday cited lower household spending offset, in part, by positive contributions from gross fixed capital formation in machinery and equipment.

Last summer’s eye-watering surge in energy costs amid tensions with Moscow briefly posed an existential threat to German industry. Against the odds, the economy held up during 2022’s first three quarters, but succumbed in Q4. It hasn’t found its footing since.

External demand is a problem, and having learned the hard way in 2022 that depending on autocratic regimes is perilous, Germany is rethinking its trade relationship with China amid Xi Jinping’s authoritarian turn.

China is, of course, a major export market for Germany, but as the Bundesbank emphasized last month, it’s also a key source of critical imports for nearly a third of German companies. That, some worry, is untenable given current geopolitical realities.

PMI data released last week suggested economic activity continued to contract in October. The preliminary read on an S&P Global gauge of German manufacturing was 40.7, which actually counted as a five-month high. At 45.8, the composite gauge remained well short of the demarcation line which separates expansion from contraction.

The IMF over the summer said Germany is the only advanced nation that’s likely to see a contraction this year.

Commenting further on Monday, ING’s Brzeski despaired that “the German economy looks set to remain in the twilight zone between minor contraction and stagnation not only this year but also next year.”