According to a statement released on Thursday, four prominent German economic institutes almost lowered their spring prognosis for the largest economy in Europe this year and drastically cut their projection for 2023 from 3.1% to -0.4%.
In a statement, they noted that ‘rising gas prices are dramatically raising energy expenditures, resulting to a substantial reduction of the purchasing power.’
The institutes forecast that the gross domestic product (GDP) will decrease by 7.9% in 2023 and by 4.2% in 2024 under a risk scenario that includes an extremely severe winter, gas shortages, and a failure to reduce energy usage.
In contrast to the 2.7% growth reported in the spring, the four institutes now predict 1.4% growth this year.
The four institutes—the Munich-based Ifo, the Kiel Institute for the World Economy (IfW Kiel), the Halle Institute for Economic Research (IWH), and the Leibniz Institute for Economic Research—stated that ‘the crisis on the gas markets is having a serious impact on the German economy’ (RWI).
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