German economy to grow in 2023 as outlook brightens

The German economy, Europe’s largest, is expected to dodge a recession and grow by 0.3 percent this year thanks to a drop in energy prices, leading economic institutes said Wednesday.

“The economic setback in the winter half-year 2022/2023 is likely to have been less severe than feared,” Timo Wollmershaeuser from the Ifo institute said in a statement.

“The main reason for this is a smaller loss of purchasing power as a result of a significant drop in energy prices.”

Inflation, however, will only ease slightly to six percent, from 6.9 percent in 2022.

In their previous forecast last autumn, the researchers were still expecting Germany’s economy to shrink by 0.4 percent, after Russia’s invasion of Ukraine sent energy and food costs surging.

But a 200-billion-euro government relief package, including a cap on gas and electricity prices, combined with mild winter weather and efforts to diversify gas supplies have helped Germany’s economy cope better than expected.

This report’s information was first seen on ZAWYA; to read more, click this link.