Most experts only expect gross domestic product to increase by around two percent in 2022 due to high energy prices, rising inflation and increased supply bottlenecks.
(Photo: IMAGO/Laci Perenyi)
Berlin The consequences of the Ukraine war are causing stock market professionals to become increasingly skeptical about the economy and worried about a recession. The barometer for the assessment of the German economy in the next six months fell by 1.7 to minus 41 points in April, as the Mannheim Center for European Economic Research (ZEW) announced on Tuesday in its monthly survey of 163 analysts and investors.
In March, due to the Russian invasion, there was a sharp drop of around 94 points since the survey began in December 1991. Economists surveyed by Reuters had now even expected a drop to minus 48 points in April. “The experts assume that the current economic situation is bad and will continue to deteriorate,” explained ZEW President Achim Wambach.
Alexander Krüger, chief economist at the private bank Hauk Aufhäuser Lampe says: “The mood of the analysts remains hailed. Given the difficult geopolitical situation, this is all too understandable. In addition, the Chinese zero-Covid strategy will put additional pressure on supply chains.” It is to be hoped that consumers will spend more again after the corona easing. According to the analyst, if there were an energy crisis, a recession and job losses would be inevitable.
A small ray of hope is the decline in inflation expectations. “However, the prospect of stagflation in the next six months still exists,” said Wambach, referring to high consumer prices and a weak economy.
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Many economists, banks and research institutes have already massively lowered their growth forecasts for the German economy and in some cases halved them. Most experts only expect gross domestic product to increase by around two percent in 2022 due to high energy prices, rising inflation and increased supply bottlenecks. The economy could even shrink in the first and current second quarters, putting Germany in a temporary recession.
More: The war in the Ukraine and high inflation unsettle German consumers