The Institute of the German Economy (IW) expects a decline in Germany's real gross domestic product (GDP) of up to 0.5% for 2023, as a result of high interest rates, inflated energy prices and weak exports paralyzing the German economy.
In its new report, the institute said the German economy's typical focus on global markets and high export rate is suffering under the strain of geopolitical shocks such as the war in Ukraine and tensions with China.
Both the country's high share of industry by international standards and its energy-intensive industries mean that it also bears the brunt of existing supply chain risks and cost shocks more than other countries, according to the German News Agency (dpa).
At the same time, domestically, IW says Germany is suffering from high inflation and private consumption which is slowing down the economy. Therefore, economic output at the end of 2023 will be around that at the end of 2019, the IW experts forecast.
For the third and fourth quarters of 2023, they estimate that the economic output will decline.
On average, IW expects 2.58 million unemployed people in 2023, 160,000 more than in the previous year. This would cause the unemployment rate to rise to 5.5%.
Th IW experts predict that the inflation rate in 2023 will be only slightly below the previous year's level at 6.5%.
Source: Qatar News Agency