German economy expected to go into recession this winter – DW – 9/22/2022

Published by
Peter Kavinsky

The German economy is facing a “slide into recession” this winter due to: Russian invasion of Ukraine, which led to a rise in energy prices, as well as a sustained rise in inflation. This is stated in prediction Federal Association of German Banks (BDB), published on Thursday, September 22.

Germany’s gross domestic product (GDP) is set to grow by 1.4 percent in 2022, according to analysts at BDB, but shrink by 1.3 percent in 2023. “The sharp rise in energy prices has led to a huge increase in costs for companies. High inflation also leads to a significant loss of purchasing power among consumers,” explains BDB deputy CEO Henriette Peucker. The long-term effects of the pandemic and the disruption of supply chains continue to negatively impact the economy, she said.

In March, after Russia’s invasion of Ukraine, the association’s analysts forecast German GDP growth of 2.2 percent in 2022 and 2.9 percent in 2023, Reuters recalled.

GDP falls until summer 2023

The decline in German GDP will continue until the summer of 2023, analysts from the association expect. A possible recovery in economic growth will be “critically” dependent on inflation, the BDB said in a forecast. Prices will rise by 8 percent in 2022 and by 6.2 percent next year, analysts predict.

“To be rate increase in July and September, the European Central Bank strongly argued that fighting inflation is its top priority. However, the expected 6% price increase for 2023 will also be well above the inflation target.

According to experts, household consumption expenditure will increase by 3.3 percent in 2002 and decrease by 1.2 percent in 2023.

Formerly analysts at the German Institute of World Economy (IfW) in Kiel also predictedGermany’s GDP could shrink by 0.7 percent by 2023. IfW expects GDP growth of 1.4 percent this year, which is lower than the summer estimate of 2.1 percent. The institute thinks the German economy will grow again in 2024, when the country’s GDP will increase by 1.7 percent.

Also see:

How Germany will replace Russian oil?

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Peter Kavinsky

Peter Kavinsky is the Executive Editor at cablefreetv.org

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