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