Poor weather conditions have hampered economic recoveryLimited usable transport routes on major rivers likely to impair industrial output, export growthThe low water levels are noticeably impacting overall economic activity in the third quarterECB rate hikes are also dampening sentiment on corporate investmentInflation could rise even higher temporarily but outlook still largely dependent on Middle East conflictNo evidence yet of second-round efects on inflation through wages at leastFor some context, months of dry weather have left the Rhine and a number of rivers in Germany with shallow waters - to the point that vessels have been unable to sail fully loaded. In turn, that has increased shipping costs and also result in slower transport of cargo across the country.Amid the impact of rising price pressures, the domestic issue there is just piling on concerns on the economy.Still, the Bundesbank says that there is hope and the German economy may still post a slight growth on the quarter at best. The central bank is also playing down any major worries on inflation for the time being, reaffirming that second-round effects are not yet evident.That being said, it won't stop the ECB from likely raising interest rates again in September next month. As a reminder, the rate hike next month is mostly a positioning move - so as to adjust their stance to be better prepared against a further rise in inflation, if need be.The ECB had previously cut interest rates to the point where policy was in a more neutral setting. So even with the adjustment rate hike in September, monetary policy will still be marginally restrictive at best. And that is not enough to deal with a full on battle against inflation if and when the time comes. Thus, needing to position for the possibility of bringing policy into even more restrictive territory. This article was written by Justin Low at investinglive.com.