QII-2022 QUARTERLY REPORT GERMANY
War and pandemic curbing growth BDI cuts GDP forecast for this year to around 1.5 percent
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Real economic output will only increase by around 1.5 percent this year. Economic recovery from the pandemic has been put on hold by the Russian invasion. The BDI had forecast a 3.5 percent rise in GDP at the start of the year. A return to pre-Covid growth levels is not expected before the end of the year at the earliest.
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Foreign trade pulling down growth: We predict exports of goods and services to expand by 2.5 percent in real terms. Imports are set to pull ahead and grow 4.5 percent, bolstered by high energy and commodity prices and the pick-up in foreign travel.
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Massive uncertainty, even without the war. Supply networks and chains are taut to breaking point. Covid is not over yet and nor are its effects, with China’s failed zero-Covid policy and the prospect of a new virus variant looming in autumn.
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Private consumption expenditure will prop up the domestic economy. The positive factors of increased disposable income, benefit payments and surplus savings still outweigh the negative pull of inflation.
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Investments on hold as material shortages intensify and uncertainty surrounding the war increases. Factors restraining construction investment are primarily a shortage of material and workers.
