Germany cannot escape recession in 2023, warns the country’s leading economic institute
Germany will not be able to escape recession in 2023, according to the country’s main economic institute, the Ifo.
While the Office for Budget Responsibility (OBR) said Britain would avoid recession – narrowly – the Ifo warned that Germany was heading for a slowdown.
He said German gross domestic product was heading for a contraction of 0.2% in the first quarter of 2023.
On the brink: Germany’s ifo institute said the country’s gross domestic product was heading for a 0.2% contraction in the first quarter of 2023
The economy shrank 0.4% in the last three months of 2022. A recession is generally defined as two consecutive quarters of contraction.
But while the OBR doesn’t see this happening in the UK, it predicts production in 2023 will fall by 0.2%. Ifo forecast a 0.1% decline in Germany in 2023.
Germany is Europe’s locomotive and the fall threatens to hit the continent’s growth.
It has been battered by the war in Ukraine, which has disrupted supply chains, hit demand for its exports and pushed up the cost of gas from Russia.