German Institute for Economic Research: German economy in recession

The Berlin-based German Institute for Economic Research (DIW) has forecast that the German economy is in recession due to the energy crisis, high inflation and a cooling global economy.

DIW has announced its October economic barometer for Germany. Consequently, the economic barometer decreased 5 points to 74.3 points in October.

In the statement, it was emphasized that the energy crisis, high inflation rates and the global economy that began to cool down caused negativities for the German economy, and that the energy crisis continued to be the main problem especially for the industry and contributed to high costs. of production.

‘INCREASING RISKS FOR THE FUTURE PERIOD’

Guido Baldi, one of the DIW economists, said: “The German economy has entered a recession. Barring gas supply shortages, the economy is likely to contract much less than it did during the 2008 financial crisis or in the first year of the Covid-19 pandemic. However, the risks remain significant for the next period.

The German government revised its official growth expectation for 2022, previously announced at 2.2 percent, to 1.4 percent on October 12 due to the effects of the energy crisis, rising prices and supply bottlenecks, while predicting a recession next year. (AA)