The German economy faces major challenges in the coming years. While the effects of the Covid-19 pandemic on economic output have not yet been overcome entirely, the consequences of the war in Ukraine intensify the inflationary pressure, in particular energy prices. Against this backdrop, already in the short term, growth rates will likely be lower than expected initially. In the medium term, the demographic development in Germany is likely to dampen potential growth, as the ageing of the population reduces the potential labour force. At the same time, high prices for energy and the targets for the reductions of greenhouse gas emissions strengthen the pres-sure to adapt production, while uncertainty about the further developments and risks remain high.