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Money: IFO Institute: Recession Milder than previously expected

Philip Cross: Greedflation? It's a government thing

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The feared burglary due to the energy crisis, lack of materials and high inflation is spared the German economy, according to the IFO Institute for the forecast in the coming year. GDP will only drop by 0.1 percent.

Die Auftragslage in der deutschen Industrie ist robust © Uwe Anspach/dpa/picture Alliance The order situation in German industry is Robust

" The expected winter recession is milder than previously assumed," said ifo economist Timo Wollmerhäuser. "In the two quarters of the winter half year 2022/23, the gross domestic product shrinks, but then it goes up again." This is what the Munich researchers predict in their outlook published on Wednesday. In September they predicted a decline of 0.3 percent .

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for the end of the year , the IFO increased its growth forecast from 1.6 to 1.8 percent . "In particular, the third quarter of 2022 was much better than expected at a plus 0.4 percent," explained Wollmerhausen. In 2024, the plus should then be similar with 1.6 percent.

inflation pressure is supposed to sink

a slight relaxation The economists in inflation : In 2023, consumer prices should not only increase more slowly at 6.4 percent than in the end of the year with 7.8 percent, but also far less than 9, 9, 3 percent estimated. The numbers are significantly lower than in autumn, "because they now take the electricity and gas price brake into account". With state aid, households are relieved of the energy costs, due to the Russian War against Ukraine. In 2024, the inflation rate should then fall to 2.8 percent.

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Die Teuerungsrate könnte auch absehbar sinken © Jin Mamengni/Xinhua/Imago The inflation rate could also decrease

The rapidly rising prices are likely to have the available real income of private households decreased, especially in the coming months and thus cool down the economy. "It is only from the second half of the year that income should increase more strongly in the course than prices and thus private consumption," said the IFO Institute.

But only if the gas is enough

The short -time work is likely to increase temporarily in the winter half of the year, at the same time the employment structure largely come to a standstill. The increase in the number of employed people is likely to slow down from around 554,000 in the end of 77,000 in the next and 80,000 in the next year. Unemployment is expected to increase by 84,000 people in 2023, but in 2024 again by 117,000. "In everything, it is assumed that there will be no gas deficiency in the next two years," emphasized the IFO Institute.

DK/HB (dpa, RTR, IFO)

Threat of recession in 2023 one factor in keeping Canadian oilpatch spending in check, says analyst .
For Canada's energy industry, 2022 was the year that finally snapped a decade of weak commodity prices and brought prosperity back to the sector. But most of these profits went to paying down debt and rewarding shareholders, not into major construction or infrastructure projects, analysts say.For Canada's energy industry, 2022 was the year that finally snapped a decade of weak commodity prices and brought prosperity back to the sector.

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