BERLIN – Russia’s war in Ukraine could reduce Germany’s 2022 economic expansion by 2 percentage points, more than halving the growth rate for this year, according to a study published by the IAB labour market research institute on Friday.
The German government’s most recent forecasts from late January predicted growth of 3.6% this year, up from 2.9% last year.
The IAB also sees inflation rising to 7% amid soaring energy prices, compared with the government’s January forecast for 3.3%.
“Especially low-income households should receive support for energy costs,” Enzo Weber, one of the authors of the study, told Reuters.
If, however, imports of Russian gas, oil and coal were stopped, the hit to economic growth would double and inflation would rise to 10%, he said.
(Reporting by Holger Hansen; Writing by Maria Sheahan; Editing by Paul Carrel)