ifo Economic Forecast Autumn 2022: Inflation Stifles Private Consumption – German Economy Facing a Hard Winter

The German economy is cooling sharply. High inflation rates are  eroding the real incomes of private households and their savings,  reducing their purchasing power. Gross domestic product will increase by  1.6 percent this year and then contract by 0.3 percent next year.  Inflation will average 8.1 percent this year and rise to 9.3 percent  next year. It is expected to peak in the first quarter of 2023 at around  11 percent. Compared with the ifo Economic Forecast Summer 2022,  the growth forecast for the coming year in particular has thus been  significantly lowered by 4.0 percentage points and the inflation  forecast raised sharply by 6.0 percentage points. In 2024 the economy will gradually return to normal.  Economic output is expected to increase by 1.8 percent and inflation to  fall to 2.4 percent.