ifo Economic Forecast Spring 2022: Consequences of the Russian-Ukrainian War Slow the German Economy

The German economy will be shaped by two very different economic drivers this year. On the one hand, the full order books of industrial companies and the gradual normalization of the Corona situation should give the economy a strong boost. On the other hand, the consequences of the Russian-Ukrainian war are dampening economic activity via significantly higher raw material prices, the economic sanctions against Russia, increasing supply bottlenecks for raw materials and intermediate products, and heightened economic uncertainty. In order to take account of the uncertainties regarding the further course of the war, two scenarios were considered for the forecast.