15 Jun 2022
IFO: Less growth, More inflation for the Economy of Germany in 2022
The Index Today
The IFO institute said on Wednesday that the Germany's economy, is likely to grow more slowly than expected this year due to the out-turn in the Ukraine war. The institute also cut its 2022 forecast for German growth to 2.5%, from 3.1% predicted in March, while revising its inflation forecast to 6.8%, up from an earlier 5.1%.
Ifo economist Timo Wollmershaeuser also said, "At the beginning of the year, high prices led to a loss of purchasing power among private households and in turn to a decline in goods consumption."
The German economy grew slightly in the first quarter of this year, supported by stronger investment, but Russia's invasion of Ukraine began having an increasing impact from the end of February, shortly after it began, Reuters mentioned in their report.
"Economic output is currently still 1 percent below the pre-pandemic level of late 2019, but we are expecting a gradual decrease in both commodity prices and material bottlenecks in the second half of this year," Wollmershaeuser added.
Ifo also predicted that German growth will reach 3.7% in 2023.