The main German economic institutes forecast that Germany will avoid a recession in 2023 and that it will grow by 0.3%, compared to an estimated contraction of 0.4% last fall, according to a joint report published this Wednesday.
“The economic downturn in the winter period of 2022-2023 is likely to have been less severe than feared in the fall. The decisive factor is a smaller loss of purchasing power as a result of the significant fall in the prices of the energy,” said Timo Wollmershäuser. , head of economic research at Ifo.
However, inflation will moderate slightly, going from 6.9% in 2022 to the 6% forecast for this year, added Wollmershäuser, who was speaking on behalf of the economic institutes that published today the forecasts for the evolution of the first European economy. .
The experts from these institutes consider that domestic demand is experiencing the positive consequences of the economic slowdown measures implemented by the German government and, furthermore, they estimate that wage increases are boosting domestic demand.
But this has the effect of keeping inflation at high levels, so the institutes expect price pressures to ease only in 2024 and then fall “hard” to 2.4%.
The forecasts include an estimate of “stronger” Gross Domestic Product (GDP) growth of up to 1.5% in 2024.
For the labor market, experts expect good news and forecast that the number of employed people will continue to grow, from 45.6 million in 2022 to 45.9 million in 2023 and 46 million in 2024.
Unemployment will temporarily increase this year from 2.42 million to 2.48 million as a result of Ukrainian refugees arriving in Germany not being able to immediately enter the job market.
But they expect unemployment to fall back to 2.41 million in 2024.
The institutes producing these forecasts for the German economy are the Ifo (Leibniz Institute for Economic Research, University of Munich) in cooperation with WIFO Austria, the Kiel Institute for the World Economy (IfW Kiel), the Leibniz Institute for Economic Research in Halle (IWH) and the RWI (Leibniz Institute for Economic Research together with the Vienna Institute for Advanced Study).
Source: TSF
