Jun 15, 2022 05:01AM ET
By: AnalysisWatch
The Ifo Institute said Wednesday that the German economy is expected to grow at a weaker pace this year than previously expected due to the economic consequences of the war in Ukraine.
The institute lowered its forecast for growth in Germany in 2022 to 2.5% from the 3.1% it predicted in March, while raising its inflation forecast to 6.8% from 5.1%.
Ifo economist Timo Wollmershaeuser said, "At the beginning of the year, high prices led to a loss of purchasing power among private households and thus to a decline in goods consumption."
Commodity prices and supply shortages are expected to gradually ease in the second half of the year, Wollmershaeuser said, and Ifo forecasts that German growth will reach 3.7% in 2023.