Slack on the way?
According to forecasts by the European Commission, Germany will grow by only 1.4% this year. However, the International Monetary Fund (IMF) expects growth of only 1.2% for 2022.
Compared to 2021, the German economy grew by 1.5% in the second quarter of this year. At that time, the impact of the Covid-19 pandemic was even more pronounced.
The data, therefore, is not encouraging. Experts are already predicting that Germany could be headed into a recession.
According to the Institute for Economic Research (IFO) at the University of Munich, a survey of 9,000 German companies showed that the level of business confidence – current and for the next six months – is the lowest in two years.
“Germany is on the brink of recession. High energy prices and a dreaded gas shortage are taking their toll on the economy,” IFO President Clemens Fuest said.
Joerg Kramer, chief economist at Commerzbank, believes that the German economy is already shrinking. The question is how much it will shrink, which, according to Kramer, depends largely on Russian President Vladimir Putin.
“If we had a complete shutdown in gas shipments, a deep recession could be inevitable,” he notes.
