(Reuters) – Germany’s economic growth will slow to 2.1% in 2022 as shock waves from the war in Ukraine are cushioned by consumers’ pent-up purchasing power and a backlog of industrial orders, said the IfW economic institute on Thursday.
IfW, one of the Germany’s leading institutes and part of a group that advises the government, revised down its previous forecast, when it had predicted growth of 4%.
“The German economy is once again facing strong headwinds,” said IfW, citing new supply bottlenecks, high raw material prices and dwindling sales opportunities caused by the war.
The German government’s most recent forecasts from late January predicted growth of 3.6% this year, up from 2.9% last year.
IfW raised its forecast for 2023, saying it expected Europe’s largest economy to expand by 3.5%, which is above the previous forecast of 3.3%.
The institute also forecast inflation will reach 5.8% this year and then hit 3.4% in 2023.
(Reporting by René Wagner; Writing by Miranda Murray; Editing by Maria Sheahan)
