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Stefan Kooths, in a file image.
The prestigious Institute for the World Economy in Kiel (IfW) predicted that the German economy will grow by 2.1% this year, half of what it had calculated in its last forecast. “The German economy and the world economy are subjected to forces with opposite effects. The strong momentum and recovery effects following the lifting of most infection control measures are nullified by the shock waves of the war in Ukraine,” declared the Vice President of the IfW, Stefan Kooths.
Although the post-pandemic recovery will continue, inflation is expected to reach 5.8% this year, the highest levels since German reunification, according to a statement from the institution. The total cost of the economic chaos that the war has brought to Germany, predicts the IfW, will be 90,000 million euros in terms of production throughout this year and the next. Russia will also enter a severe recession due to the sanctions, according to the IfW.
The rise in prices of raw materials and bottlenecks in supply will limit the use of Germany’s productive capacity until the end of 2022, although the institute forecasts that in 2023 the losses will be recovered and the economy will grow by 3.5 %. The GDP of the Eurozone will grow by 2.8% in 2022 and 3.1% in 2023, while the global economy will expand by 3.5% and 3.6% respectively, less than it would have been If the war does not occur, according to the forecasts presented this Thursday (03.17.2022) by the institute. (EFE/AFP)
