“Not out of the woods yet”

Washington The International Monetary Fund (IMF) is predicting a phase of economic weakness in Germany – and nevertheless urges budgetary discipline. The industrialized countries are in a situation “in which inflation is very high and is very likely to remain high for several years,” said IMF Vice Director Gita Gopinath in an interview with the Handelsblatt. “As such, we are now advising countries that fiscal policy must help monetary policy fight inflation.”

In other words, the state should hold back – instead of pushing the economy, as is usually the case in a downturn. The IMF assesses the growth prospects for Germany much more pessimistically than the government in Berlin.

“The fact is that the German economy is expected to develop very slowly this year, a consequence of the still high energy prices,” explained Gopinath. The Monetary Fund even predicts that the German economy will fall slightly in 2023 – by 0.1 percent.