In view of the current situation, the experts at the International Monetary Fund do not expect the German economy to recover significantly until 2023.
According to the International Monetary Fund (IMF), the war in Ukraine and the disruptions in global supply chains are slowing down Germany’s economic recovery from the slump in the corona pandemic.
At the same time, high energy prices are causing inflation rates to rise to their highest levels in decades, according to a report by the IMF. The recovery is expected to gain some momentum only in 2023, if energy supplies remain secure, supply shortages ease and new coronavirus-related restrictions are avoided.
IMF adjusts forecasts
In its basic scenario, the IMF assumes a weak upswing, but also sees risks. In 2022, the IMF expects economic growth of around 2 percent. In 2023, gross domestic product (GDP) growth should therefore be slightly above 2 percent. In its spring forecast, the IMF had forecast growth of 2.1 percent for 2022 and 2.7 percent for 2023.
According to the IMF, inflation is likely to be around 6.5 percent in 2022 and weaken to around 3.5 percent in 2023. “However, growth could be weaker and inflation higher than in the baseline scenario,” said the IMF. “The biggest threat is a permanent and complete cessation of Russian gas exports to Germany and Europe.” It would therefore take at least two years to completely replace the missing deliveries in Germany.
More investment in renewable energy
The most important political tasks are to secure the natural gas supply, cushion the effects of the war in Ukraine and increase the resilience of the economy. The uncertain supply of fossil fuels makes the transition to renewable energies even more important. To ensure a smooth and cost-effective transition, public and private investment would need to be increased.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
