Federal Minister for Economic Affairs Robert Habeck has presented the Federal Government’s spring forecast . The current forecast assumes an increase in gross domestic product of 2.2 percent in 2022 and 2.5 percent next year in price-adjusted terms.

The main factor clouding the economic outlook is the impact of Russia's war of aggression against Ukraine. High energy prices, sanctions, increased insecurity and fragile supply chains are all factors that are impacting negatively on the growth prospects of the German economy. According to the Federal Minister for Economic Affairs, a stoppage of gas supplies from Russia would result in a recession. In its last annual economic report published in January, the Federal Government was still expecting GDP to grow by 3.6 percent.

Independence from Russian energy imports

“The risks to the economy are clear. After two years of the pandemic, Russia’s war is a new exacerbating factor. The war against Ukraine and its economic impact remind us that we are vulnerable,” said Federal Minister for Economic Affairs Habeck. The Federal Government is working flat out to make Germany independent of Russian energy imports. It is also vital to quickly move away from fossil fuels and expand renewables. “At the same time, the Federal Government is doing everything it can to preserve the fundamentals of our economy in difficult times, too, by creating a targeted protective shield for our businesses which we are now swiftly implementing,” Habeck added.

Relief for increased consumer prices

Higher energy prices as a result of the war in Europe are also making themselves felt in consumer prices. The Federal Government expects an inflation rate of 6.1 percent for 2022 – a figure otherwise seen only in exceptional cases, such as during the Oil Crisis. The inflation rate is expected to drop again next year.

The Federal Government is responding to the increased cost of energy, food and mobility and has adopted comprehensive measures to relieve the burden on citizens.