Germany’s central bank lowers 2022 GDP growth forecast to 1.9 pct

BERLIN, June 10– The Deutsche Bundesbank, Germany’s central bank, on Friday lowered its growth forecast for the country’s gross domestic product to 1.9 percent in 2022 from its previous projection of 4.2 percent growth back in December last year. Uncertainty about future economic developments was “exceptionally high” due to the Russia- Ukraine conflict.

BERLIN, June 10 (Xinhua) — The Deutsche Bundesbank, Germany’s central bank, on Friday lowered its growth forecast for the country’s gross domestic product (GDP) to 1.9 percent in 2022 from its previous projection of 4.2 percent growth back in December last year.

Economic recovery is likely to continue but at a “considerably more subdued pace” than previously projected, the bank said in a statement. Uncertainty about future economic developments was “exceptionally high” due to the Russia-Ukraine conflict.

In the first quarter of 2022, Germany’s economy barely grew by 0.2 percent quarter-on-quarter, according to the Federal Statistical Office (Destatis). GDP growth was still 0.9 percent below the pre-COVID-19 pandemic level.

“Despite difficult framework conditions in the global economy, the German economy started 2022 with a slight growth,” Destatis President Georg Thiel said.

However, the Russia-Ukraine conflict and the continuing impact of COVID-19 have “intensified existing distortions, including interruptions in supply chains and rising prices,” Thiel stressed.

Inflation in Germany hit 7.9 percent in May, the highest level since the first oil crisis in the winter of 1973-1974, according to preliminary figures published by Destatis. Energy prices even soared by 38.3 percent year-on-year.

The “exceptionally high inflation is expected to stoke uncertainty among consumers and will erode their purchasing power,” the Bundesbank said in its outlook. Households are “likely to spend at least part of the savings accumulated during the coronavirus pandemic on consumption.” Enditem