Germany lost over $100 billion as a result of the chaos brought about by the Ukraine War, the head of a major economic research institute in the country has said.
Marcel Fratzscher, who serves as the president of the German Institute for Economic Research (DIW), has said that the German economy ultimately lost more than $100 billion as a result of the Ukraine War so far.
The official put particular emphasis on the country’s dire energy situation in relation to the figure, with the ongoing shortage of natural gas in particular having a substantial negative effect on German industry.
Speaking to the Rheinische Post, Fratzscher said that the impact the crisis has had on the country’s industry has cost Germany dearly, telling the paper that the shortages have cost EU member-state roughly $107 billion in economic output.
“The Ukraine war and the associated explosion in energy costs cost Germany almost 2.5 per cent or 100 billion euros in economic output in 2022,” he remarked.
“Germany is economically more affected by the crisis because it was more dependent on Russian energy, has a high proportion of energy-intensive industry and is extremely dependent on exports and global supply chains,” he went on to add.
Fratzscher went on to suggest that things are only going to get worse over the coming years, with the economist predicting that the effects of the Ukraine War will impact the German economy more and more as time goes on.
Such an assessment appears to be in keeping with other recent predictions about the country’s short-term economic future.
Although officials both at the German and EU level have tried to put a brave face on the crisis — even going so far as to suggest that the country will just about narrowly avoid a recession this year — such a forecast appears to have now soured significantly.
According to a report by Der Spiegel published on Monday, Germany’s Bundesbank central bank is now predicting that the European nation will indeed slide into recession this economic quarter as the country’s economy continues to shrink.
“Economic output in the first quarter of 2023 is likely to be lower again than in the previous quarter,” the central bank reportedly said. Such a backslide will mark the second quarter in a row of negative growth in Germany.
The bank also poured cold water on the idea that the economy could recover later in the year, saying that, while such a bounce-back is possible, there is no evidence to support it will happen.
“Things could slowly pick up again as the year progresses,” it said. “However, no significant improvement is in sight.”
Overall, the institution expects Germany to experience negative overall growth this year, with it also expecting the government will end up having an increased deficit by the time 2024 arrives.
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