Economic Institute IfW predicts a 0.7% decline in German GDP in 2023
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Today, September 8, the German Institute for World Economics (IfW) updated German GDP forecast for the current and next years. According to the new forecast, in 2022 Germany’s GDP will grow by 1.4% (previously predicted to grow by 2.1%), and in 2023 it will decrease by 0.7% (against an increase of 3.3% in the earlier forecast). In 2024, GDP should return to growth – by 1.7%.
IfW expects inflation to be 8% this year and 8.7% next year. This is due to a significant increase in energy prices. The decline in prices for them, according to analysts of the institute, will begin only in 2024. “The German economy is in a downward trend,” the authors of the report note. The German economy is “sliding into recession in a phase in which it has barely recovered from the pandemic-related downturn.”
In early September, the German government agreed a package of measures to reduce the pressure of inflation on households and businesses totaling €65 billion. It includes assistance to socially disadvantaged groups of the population, tax breaks for some companies, etc.
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