Title: German economy to lose $265 billion in added value due to war, high energy prices-study
Aug 09, 2022 04:50AM ET
According to a study by the Institute for Employment Research, the German economy will lose more than 260 billion euros ($265 billion) in value added by 2030 due to the war in Ukraine and high energy prices, which will have a negative impact on the labor market.
Compared with expectations for a peaceful Europe, Germany's price-adjusted gross domestic product will be 1.7 percent lower next year and there will be about 240,000 fewer people employed, the study published on Tuesday said.
The employment level is expected to stay at roughly that level until 2026, when expansionary measures will gradually start to outweigh the negative effects and lead to a plus of about 60,000 employees in 2030.
One of the biggest losers will be the hospitality industry, which has already been hit hard by the coronavirus pandemic and is likely to feel the negative effects of declining consumer spending power.
Energy-intensive sectors such as chemicals and metals are also likely to be particularly affected.
According to the study, if energy prices, which have so far risen by 160%, double again, Germany's economic output in 2023 will be almost 4% lower than it would have been without the war. Under these assumptions, 660,000 fewer people will be employed in three years' time and 60,000 fewer in 2030, the report said.