Deutsche Bank expects less growth, higher inflation in Germany amid Russia’s war against Ukraine

By Bahattin Gonultas

BERLIN (AA) - Deutsche Bank, one of the largest banks in Germany, reduced its gross domestic product growth forecast for 2022 from 4% to 2.5% due to the Russian war on Ukraine.

Deutsche Bank economists, in their report, changed their economic forecasts, predicting more inflation and less growth.

Due to the sharp rise in energy prices as the impact of the war, the bank significantly increased its inflation forecast to 5.5%, the report said.

The bank's previous inflation forecast was 4.2% for 2022.

In the worst case, when oil and gas supplies are at least temporarily interrupted, inflation could rise to 6.5% to 7.0%, the report added.

The report also said that if the war lasts for a long time, the growth in GDP will be between 1% and 1.5%.

The bank also expected that Germany-Russia trade will decrease sharply by 75%.

The two countries' bilateral trade increased by 34.1% to €59.8 billion in 2021.

* Writing by Gokhan Ergocun from Istanbul