Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Less growth, more inflation for German economy in 2022 -Ifo

Economic Indicators Jun 15, 2022 07:20AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: A robot adjusts a windscreen in a fully automated process on a model of the A-class production line of German car manufacturer Mercedes Benz at the Daimler factory in Rastatt, Germany, February 4, 2019. REUTERS/Kai Pfaffenbach/File Photo/File

BERLIN (Reuters) -Germany's economy, Europe's largest, is likely to grow more weakly than expected this year due to the consequences of the war in Ukraine, the Ifo institute said on Wednesday.

The institute cut its 2022 forecast for German growth to 2.5%, from 3.1% predicted in March, while revising its inflation forecast to 6.8%, up from an earlier 5.1%.

"At the beginning of the year, high prices led to a loss of purchasing power among private households and in turn to a decline in goods consumption," said Ifo economist Timo Wollmershaeuser.

The German economy grew slightly in the first quarter of this year, supported by stronger investment, but Russia's invasion of Ukraine began having an increasing impact from the end of February, shortly after it began.

"Economic output is currently still 1 percent below the pre-pandemic level of late 2019, but we are expecting a gradual decrease in both commodity prices and material bottlenecks in the second half of this year," Wollmershaeuser added.

Ifo predicted that German growth will reach 3.7% in 2023.

Separately, Germany's IfW economic institute said it was raising its forecast for German inflation this year to 7.4% from 5.8% previously. For 2023, the IfW raised its inflation forecast to 4.2% from 3.4%.

IfW, one of Germany's leading institutes and part of a group that advises the government, nevertheless left its forecast for GDP growth this year at 2.1%. For 2023, however, it lowered its projection to 3.3% from 3.5%.

"The purchasing power of disposable incomes is massively affected by high inflation," the IfW said in a report. "In the current year, real disposable incomes will therefore again decline significantly."

Less growth, more inflation for German economy in 2022 -Ifo
 

Related Articles

UK inflation tops 10%, highest since 1982
UK inflation tops 10%, highest since 1982 By Reuters - Aug 17, 2022

By David Milliken and William Schomberg LONDON (Reuters) -British consumer price inflation jumped to 10.1% in July, its highest since February 1982, up from an annual rate of 9.4%...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email