The German economy has just averted the feared recession according to the opinion of the "wise men". The outlook has brightened slightly, particularly because of the more stable energy supply, the committee announced on Wednesday in its updated economic forecast. Overall, however, the situation remains tense.
For the current year, the gross domestic product should grow by 0.2 percent according to the economic experts. In autumn, they still expected a downturn of 0.2 percent and a price increase of 7.4 percent. They expect growth of 1.3 percent for the coming year.
"The inflation-related loss of purchasing power, the poorer financing conditions and the slow recovery in foreign demand are preventing a stronger upswing this year and next," says Monika Schnitzer, chairwoman of the German Council of Economic Experts.
According to the assessment of the committee, a noticeable relaxation in consumer prices is not to be expected until next year. The reason for this is that rising wages and high producer prices are likely to support inflation for the time being, as committee member Martin Werding said.
"Inflation is increasingly affecting the economy," says Werding. In the current year, the economists expect an inflation rate of 6.6 percent. In the coming year it will then fall to 3.0 percent.
The experts had warned of considerable downside risks in autumn, above all because of the impending gas shortage. In their annual report, they therefore predicted a recession for the German economy. However, the situation on the energy markets has eased since then.
The EU Commission has recently raised its expectations of the German economy and, like the federal government, assumes minimal growth.
In the updated forecast, the committee warned that there were “significant risks” in the energy supply, also with a view to the coming winter. "In order to completely refill the gas storage tanks and to prevent a gas shortage in the coming winter, we must continue to save energy extensively," said the expert Veronika Grimm. This applies even if Germany expands its imports.
The Council of Economic Experts also commented on the current banking crisis, which started in the USA almost two weeks ago and is also having a heavy impact on European banks. The committee explained that the uncertainty on the financial markets had recently increased as a result.
"Unlike in the global financial crisis, the difficulties of individual banks are not based on largely worthless financial products." The interbank market and the supply of credit to the real economy are currently "not disturbed". The financial market stability is therefore "currently not in jeopardy", concluded the economists.