ifo Economic Forecast Autumn 2022: Inflation Stifles Private Consumption – German Economy Facing a Hard Winter
ifo Institut, München, 2022
ifo Schnelldienst digital, 2022, 3, Nr. 5, 01-12
The German economy is cooling sharply. High inflation rates are eroding the real incomes of private households and their savings, reducing their purchasing power. Gross domestic product will increase by 1.6 percent this year and then contract by 0.3 percent next year. Inflation will average 8.1 percent this year and rise to 9.3 percent next year. It is expected to peak in the first quarter of 2023 at around 11 percent. Compared with the ifo Economic Forecast Summer 2022, the growth forecast for the coming year in particular has thus been significantly lowered by 4.0 percentage points and the inflation forecast raised sharply by 6.0 percentage points. In 2024 the economy will gradually return to normal. Economic output is expected to increase by 1.8 percent and inflation to fall to 2.4 percent.