The IFO Institute is no longer anticipated by a light recession in 2023. The year 2022 was marked by a high return from household consumption, despite inflation.
by Cécile Boutelet (Berlin, Correspondence)
Despite the magnitude of the energy crisis that strikes it, Germany resists. And the economic experts recognize that many forecasts on the evolution of the first European economy have been too pessimistic. This is what emerges from the analyzes of the IFO Institute and the Federal Ministry of the Economy, published on Wednesday December 14, which rely on a light recession or even a stagnation of Germany in 2023, even if the perspectives remain uncertain.
For the current year, the IFO Institute even noted its estimates, with growth expected at 1.8 %, against 1.6 % so far. A very honorable result given the shock collected by the country in 2022. “The third quarter, in particular, was much better than expected,” said Timo Wollmershäuser on Wednesday morning in Berlin, during a press conference.
The German economy recorded a solid increase of 0.4 % in the fall, the Statistics Office reported on November 25. However, this should not avoid a recession this winter, said the director of forecasts. “We will have a contraction of the gross domestic product [GDP] during the two quarters of winter 2022-2023. Then the activity will start upwards. In 2023, [it] should drop by only 0.1 %.”
Good labor market hold
The most amazing was the behavior of consumers, in great shape. Despite historical inflation – currently at 10 % – which is pursuing their purchasing power, households have caught up with expenses not made during the pandemic, either by drawing from their savings, or by taking advantage of the aid granted by the State to alleviate the energy crisis.
Everything shows that the Germans celebrated the return of freedom to travel and go out: the sectors of trade, transport, hotel and services have increased sharply. The good performance of the labor market undoubtedly also contributed to this confidence: 46.2 million people worked across the Rhine in the fall. This is a new historic record, to which the Ukrainian refugees arrived in Germany contributed, 20 % of which work, underlined the IFO.
On the business side, the situation is more contrasted. Groups very greedy in energy such as chemistry, the manufacture of steel, paper or glass had to greatly lower their production, which made it possible to reduce the consumption of gas. But the rest of the industry continues to take advantage of full orders for orders, the companies having, it seems, adapted to the reduction, then to stop the Russian gas deliveries this summer.
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