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Die wirtschaftliche Entwicklung im Inland: Gestiegene Energiepreise belasten die Erholung

The prospects for economic recovery in Germany have deteriorated significantly due to the war in Ukraine and the accompanied sanctions imposed on Russia. Already at the end of last year, the rising number of new infections and the associated infection control measures, as well as persistent supply bottlenecks, led to a decline in economic output. This brings the German economy to the brink of a new recession. Above all, the oil and gas prices, which have risen sharply since December, are placing a heavy burden on companies and households. Since there are currently only limited alternatives to supplies from Russia, especially in the case of gas, prices are expected to remain high for some time. Private consumption, on the other hand, will be supported by the easing of infection control measures already implemented in February. All in all, economic expansion this year is likely to be significantly lower than we assumed in our December forecast. The main reason for this is the sharp rise in oil and gas prices. Nevertheless, the lifting of most infection control measures and the easing of supply bottlenecks are expected to lead to a fairly significant expansion of production in the summer half-year. On an annual average, we expect GDP to ex-pand by 2.5% this year. Next year the expansion should be 3.6%. The German labour market continues to be robust. Recently, strong growth was recorded especially in employment subject to social security contributions. This trend is likely to continue. The number of marginally employed is also likely to rise again, although the increase in the statutory minimum wage makes this form of employment less attractive. At the same time, the increase in the mini-job limit will again favour marginal employment. The unemployment rate should still average 5.0% in 2022 and 4.9% in 2023. Since the beginning of this year, prices for natural gas and crude oil have risen sharply. The pressure on consumer prices is therefore likely to continue for some months. The inflation rate will probably remain higher than the average of the previous years for some time even after the commodity price shock subsides. However, we do not expect significant increases in collectively agreed wages in the short term, so this does not threaten to lead to a pronounced wage-price spiral. Overall, the infla-tion rate should be 5.2% this year and decline to 2.3% next year. At a good 78 billion euros, the financing deficit of the public budgets is likely to be much lower this year than last year (132 billion euros). Despite a series of revenue-reducing measures, government revenues are likely to increase significantly as the economy continues to recover. In 2023, we expect the fiscal deficit to decline further to just under 70 billion euros.

Schmidt, T., G. Barabas, N. Benner, M. Dirks, N. Isaak, R. Jessen, P. Schacht and A. Steuernagel (2022), Die wirtschaftliche Entwicklung im Inland: Gestiegene Energiepreise belasten die Erholung. RWI Konjunkturberichte, 73, 1, 39-78

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