According to economic researchers in Kiel, the upswing in the German economy will be halted by the consequences of the Ukraine war. In the current year, gross domestic product (GDP) is likely to increase by 1.4 percent. For 2023, however, the Kiel Institute for the World Economy (IfW) revised its forecast downwards by four percentage points. The German economy can expect a minus of 0.7 percent, the institute announced on Thursday. The expensive energy imports made Germany poorer, it was said.
“With the high import prices for energy, an economic avalanche is rolling towards Germany. Above all, energy-intensive production and consumer-related economic sectors will be hit hard,” said IfW Vice President Stefan Kooths.
According to the forecasts, the German energy import bill will increase by 123 billion euros this year and by a further 136 billion euros in 2023. The money is lacking domestically for consumption and is reducing the profitability of energy-intensive companies, it said.
Expensive energy imports mean that Germany now has to remit a far larger part of its income abroad than before. "With its relief packages, the state can only redistribute the burdens, it cannot eliminate them," says Kooths.
As a result, Germany's economic power will decrease considerably and will be 130 billion euros lower than previously expected in the coming year. The purchasing power of private households is likely to fall by 4.1 percent in the coming year, more than ever before in reunified Germany.
Inflation is likely to be even higher next year at 8.7 percent than this year's eight percent. Compliance with the debt brake should be possible in 2023, but will be tight in 2024, according to the researchers.
After a survey among its member companies this week, the Hamburg Chamber of Commerce also warned of a very difficult development and called for the federal government to rethink energy policy.