"High inflation is reducing households' disposable incomes and leading to a decline in private consumer spending in the current year," the IfW said. (Reporting by Rene Wagner, Writing by Friederike Heine; Editing by Paul Carrel)
BERLIN, March 15 (Reuters) - Germany's IfW economic
institute said on Wednesday it did not expect a strong economic
recovery in 2023 due to continued losses in consumer purchasing
power as a result of stubbornly high inflation.
The Kiel-based researchers raised their growth forecast for
2023 from 0.3% to 0.5%. The German government is predicting
growth of 0.2%. For 2024, the institute upgraded its growth
forecast from 1.3% to 1.4%.
"The German economy is struggling to emerge from the energy
crisis," the IfW said in its spring forecast. "The economic
consequences of the war in Ukraine have stalled the recovery
from the pandemic and noticeably depressed the level of gross
domestic product."
According to the report, consumer prices are set to rise by
5.4% this year, and by 2.1% in 2024.
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