The war in Ukraine has had a drastic impact on overall economic development in Germany. The German Advisory Council has corrected its assessment significantly downwards, reports that Handelsblatt. Economic experts predict that gross domestic product will only grow by 1.8 percent in 2022. In November they had still expected growth of 4.6 percent.
The new growth forecast for 2023 is 3.6 percent. “Russia’s war of aggression against Ukraine significantly increases uncertainty, dampens growth and contributes to rising energy and consumer prices,” quoted Das Handelsblatt from the forecast to be released today.
Due to the sharp rise in energy prices, the council of experts also expects a significantly higher inflation rate: the estimate for Germany is now 6.1 percent for 2022 and 3.4 percent for 2023. Previously, the economists had estimated inflation for the current year at 2.6 percent.