In the past few weeks, Germany's leading economic research institutes have continued to correct their economic forecasts downwards.

Now the Federal Government's most important economic policy advisory body is following suit.

The German Council of Economic Experts assumes that gross domestic product (GDP) will only grow by 1.8 percent this year.

That's more than halving its forecast from November.

At that time, the "economic experts" had forecast growth of 4.6 percent for this year.

The Russian war of aggression against Ukraine and high energy prices worsened the economic outlook "drastically," writes the panel in its new forecast presented on Wednesday.

Julia Loehr

Business correspondent in Berlin.

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Even if gas and oil have continued to flow from Russia so far, meaning that the supply of energy has not yet become scarcer: Uncertainty about future developments alone has recently driven up energy prices significantly.

In addition, as at the beginning of the corona pandemic, there are interrupted supply chains because car manufacturers, for example, can no longer get cable harnesses from Ukraine.

Food prices are also a concern for economists.

In this area, the supply has already become scarcer, with Ukraine, an important exporter of wheat on the world market, is missing.

Russia has restricted fertilizer exports.

Producing the same in Germany is expensive because large amounts of gas are required for production.

The inflation rate is likely to rise to 6.1 percent this year due to high energy prices,

predicts the Advisory Council.

It would thus be more than three times as high as the European Central Bank's (ECB) target of 2 percent.

In the past year, the price level had risen by 3.1 percent.

"The great dependency on Russian energy supplies harbors the considerable risk of lower economic output and higher inflation," writes the Council - and advises politicians: "Germany should immediately pull out all the stops to arm itself against a stop in Russian energy supplies and against dependence The Council does not take a clear position on the question, currently controversial among economists, as to whether Germany or the EU should stop imports from Russia on their own initiative in the hope of stopping Russian President Vladimir Putin.

He only refers to studies according to which oil can be obtained comparatively easily from other countries, but this is much more difficult with gas due to the lack of infrastructure.

Unlike in other European countries, Germany has not yet had any terminals for tankers with liquid gas.

Economics and Climate Protection Minister Robert Habeck (Greens) announced the early warning level of the “Gas Emergency Plan” on Wednesday.

This regulates which areas are the first to receive less energy in the event of a gas shortage.

This would affect industry in particular.

Private households and critical infrastructure such as hospitals would have priority.

Last year, Germany received more than half of its gas supplies from Russia, but according to Habeck, the share has now fallen to 40 percent.

The German Council of Economic Experts is counting on the world situation easing in the coming year.

For 2023, the economists predict 3.6 percent growth - since Lars Feld's departure, the council currently has only four members.

Inflation is then expected to fall to 3.4 percent, which is still above the ECB's target.

The new report also has at least one positive aspect: "In the summer half of 2022, the consumption of contact-intensive services should increase and make a positive contribution to the development of GDP." Going to concerts and traveling could at least be a small ray of hope.

Overall, however, the outlook remains bleak.