Government significantly lowers growth forecast for 2022

Created: 04/27/2022, 14:39

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In view of the Ukraine war, caution is now also growing within the German government.

Economics Minister Robert Habeck cut the economic forecast significantly on Wednesday.

Berlin - In view of the consequences of the Ukraine war, the federal government sees clear risks for the economy in Germany.

She expects weaker economic growth this year.

In the spring projection presented on Wednesday, growth in gross domestic product of only 2.2 percent is expected, and growth of 2.5 percent for 2023.

In January, the federal government had still expected growth of 3.6 percent this year in its annual economic report.

The federal government does not expect the high consumer prices to ease anytime soon.

An inflation rate of 6.1 percent is expected for the current year.

Such rates have so far only been observed during the oil crisis or shortly after reunification.

According to the forecast, the inflation rate will be significantly lower again next year at 2.8 percent.

Fueled by massive increases in energy prices, the inflation rate climbed to 7.3 percent in March.

War in Ukraine: Sanctions and rising insecurity are a burden

The Economics Ministry named the Russian war of aggression against Ukraine as the main reason for the clouding over of economic prospects in Germany.

Both the high energy prices and the sanctions and increased uncertainty weighed on the growth prospects of the German economy.

"After two years of the corona pandemic, the war in Russia is adding a new burden," said Economics Minister Robert Habeck (Greens).

"The war against Ukraine and its economic effects remind us that we are vulnerable."

At the same time, the federal government is doing everything to preserve the substance of the German economy, even in difficult times.