BERLIN (Dow Jones)–The leading economic research institutes will significantly lower their forecast for the German economy amid the energy crisis, according to a report in the Handelsblatt. Germany’s gross domestic product is only expected to grow by 1.4 percent this year (spring report: 2.7 percent). For the coming year, the institutes are even assuming a decline in gross domestic product of 0.4 percent after previously predicted growth of 3.1 percent, as reported by the Handelsblatt with reference to government circles.
In terms of price development, the institutes are therefore assuming an accelerated rise in prices. According to the autumn forecast, the inflation rate should be 8.4 percent (6.1) in 2022 and 8.8 percent (2.8) in 2023. This means that inflation would still be higher than the forecast presented in the spring for the case of an immediate gas supply stop. For this scenario, the economists in April still assumed an inflation rate of 7.3 percent in 2023 and 5.0 percent in 2023.
The joint diagnosis is prepared on behalf of the Federal Ministry of Economics by the Ifo Institute in Munich, the IfW in Kiel, the IWH in Halle and the RWI in Essen. The institutes will present their new forecast on Thursday at 10 a.m.