At the end of last year, the world was not in order either, but the hope of a noticeable economic upswing dominated among economic researchers.
In mid-December, the Kiel Institute for Economic Research (IfW), like many other experts, forecast growth in German gross domestic product (GDP) of 4 percent for this year.
Business correspondent in Berlin.
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Three months later, the Russian war of aggression destroyed that hope.
On Wednesday, several leading economic research institutes significantly lowered their growth forecasts for 2022.
The Kiel economists now expect only 2.1 percent growth this year, the RWI in Essen with 2.5 percent and the IWH in Halle still with 3.1 percent.
While other countries have long since returned to the pre-Corona level, this will be the case in Germany at best in the second half of the year, estimates IfW Vice President Stefan Kooths.
"Without the strong post-pandemic buoyancy forces, German economic output would have declined this year," he said.
Inflation is likely to increase further
Of particular concern is that the war is likely to drive inflation further.
High energy and food prices are already weighing on consumers and businesses, thereby slowing growth.
On Thursday, European Central Bank President Christine Lagarde warned that the Ukraine war will further amplify short-term factors pushing up inflation.
It is expected that energy prices will remain high for longer, after all, gas prices have risen by 73 percent and oil prices by 44 percent since the beginning of the year.
"Food inflation pressures are also likely to increase," Lagarde said at The ECB and its Watchers conference.
The central bank now expects inflation in the euro zone to average 5.1 percent for 2022 as a whole;
for a more unfavorable development of the war on prices, however, she also considers 7.1 percent possible.
The economic researchers in Kiel also fear “record inflation in reunified Germany and the euro area” in view of the ongoing war.
The European statistics office Eurostat reported on Thursday that the inflation rate in the currency area was even 5.9 percent instead of 5.8 percent as originally estimated.
DIHK survey shows disruptions in supply chains
A current survey by the Association of German Chambers of Industry and Commerce (DIHK) clearly shows the negative dynamics that result from the interaction of war and the corona crisis: 60 percent of companies report additional disruptions in their supply chains that have to do with Russia's war in Ukraine to have.
There is a "strong increase" in the problems, said DIHK foreign trade chief Volker Treier.
At the beginning of the year, 84 percent of the companies had reported delivery problems.
At that time, most of it still had to do with the consequences of the corona pandemic.
In China in particular, economic life repeatedly comes to a standstill when infections accumulate in a region.
Ralf Stoffels, Vice President of the DIHK and head of a company that produces insulating materials in Ennepetal, North Rhine-Westphalia, reported on the problems faced by medium-sized companies.
If the warning light on a forklift truck breaks, you have to wait around 24 weeks for a replacement.
However, the forklift truck is not allowed to drive without the light.
He described the cost increases due to high energy prices as “dramatic”.
Stoffels warned against job cuts in industry if the financial situation of the companies continued to deteriorate.
Dependence on Russian gas makes people vulnerable
Germany is particularly affected by its dependence on Russian gas and its interconnected economy.
However, war is slowing growth around the world.
The OECD, the association of industrialized countries, had recently expected global economic output to grow by 4.5 percent this year.
On Thursday, she predicted that the Ukraine war would cost the world one percentage point of growth and increase global consumer price inflation by an additional 2.5 percentage points.
While the current crises will only dampen prosperity growth in Germany and other rich countries, they are throwing poorer countries into existential difficulties.
The pandemic had already brought many countries to the brink of insolvency.
With Ukraine and Russia now threatening to fail as major wheat suppliers and energy becoming unaffordable for many, there could be an additional 8 to 13 million malnourished people this year, the UN Food and Agriculture Organization (FAO) recently warned.
Around fifty countries are at risk – especially the Asia-Pacific region, North Africa and the region south of the Sahara and the Middle East.Keywords: