The leading German economic institutes expect the economy to collapse in the coming year in view of the energy crisis.
In their autumn report published on Thursday, they expect economic output to fall by 0.4 percent on average for 2023. In their spring report, they still expected growth of 3.1 percent.
The sharp rise in gas prices increased energy costs “drastically” and led to a “massive overall economic loss of purchasing power,” the reasoning said. The escalation on the gas markets means a “permanent loss of prosperity” for Germany.
Gross domestic product (GDP) is likely to increase by 1.4 percent this year – despite a decline in the second half of the year. After the recession in 2023, the institutes expect an increase of 1.9 percent in 2024.
According to experts, inflation should reach an average of 8.8 percent in the coming year – after 8.4 percent this year. Only in 2024 will the two percent mark be “gradually reached again”.
The Leibniz Institute for Economic Research in Essen (RWI), the Leibniz Institute in Halle (IWH), the Munich Ifo Institute and the Institute for the World Economy (IfW) in Kiel are involved in the spring forecast. The Federal Government uses your report as a basis for its own prognosis.
