The current challenges appear on top of the country's already difficult economic situation; this already handicapping situation was caused on the one hand by the lack of skilled labor and on the other hand by the drop in productivity.
The Russian-Ukrainian war, which has been going on for almost a year, will cost the German economy around 175 billion euros this year, according to a report by the German Economic Research Institute (IW), which promotes economic liberalism.
If the calculations of the Cologne-based think tank are correct, then each person living in Germany will receive around 2,000 euros in direct costs this year. According to IW's forecasts, the German economy will also lose around 4.5 percent of its gross domestic product (GDP) in 2023 due to high energy prices and narrow supply intersections, reports Die Welt.
The IW highlighted that the current challenges appear on top of the country's already difficult economic situation; this already handicapping situation was caused on the one hand by the lack of skilled labor and on the other hand by the drop in productivity.
In addition, Germans have already witnessed colossal welfare losses in the last three years due to the shutdowns related to the COVID-19 epidemic and other factors that have wreaked havoc on the economy. As IW notes, the epidemic year of 2020 resulted in a loss of added value of 175 billion euros, while in 2021 and 2022 GDP losses reached 125 billion euros and nearly 120 billion euros, respectively.
Thus, between 2020 and the end of 2023, the German economy will lose 595 billion euros.
IW economist Michael Grömling, speaking about Germany's not so rosy economic situation, explained that conditions "remain very fragile" and warned that "the state of emergency will continue to be present in the coming months and weigh on prosperity".
Featured image: Reuters
