A panel of independent economic advisers to the German government has downgraded its 2022 growth forecast for Europe’s largest economy in light of Russia’s aggression in Ukraine and concerns over energy supplies and prices.
BERLIN – A panel of independent economic advisers to the German government on Wednesday downgraded its 2022 growth forecast for Europe’s largest economy in light of Russia’s invasion of Ukraine and concerns over energy supplies and prices.
The group predicts that Germany’s gross domestic product will grow by only 1.8% this year, compared to the 4.6% forecast in November. It said the economy would not return to its pre-epidemic levels until the third quarter.
Last year, the country’s GDP grew 2.9%; In the last quarter of 2021, it decreased by 0.3% over the previous three months.
“High dependence on Russian energy supplies includes substantial risks of a recession, including low economic output and even significantly higher inflation rates,” the panel said.
Economists said in a statement that “Germany should do everything possible to be vigilant against the immediate suspension of Russian energy supplies and to end its dependence on Russian energy sources as soon as possible.”
They added that “in the long run, the goal should be to ensure higher energy security, for example through the expansion of renewable energy and the diversification of energy imports.” These measures reflect the policy of the German government
Shortly before economists released their forecasts, Germany launched an early warning level for natural gas supplies amid concerns that Russia could cut off supplies unless it is paid in rubles.
The panel of advisors forecast 3.6% growth in 2023.
This version has been revised to show that Germany’s GDP for 2021 has been revised from 2.8% to 2.9%; And GDP fell 0.3% in the fourth quarter, not 0.7%.