Energy crunch likely to cost German economy $64B in 2022: Report

By Tuba Sahin

ANKARA (AA) – As higher gas and oil prices continue draining billions of euros, the German economy’s real income losses in 2022 will amount to some €64 billion ($64 billion), according to the Munich-based Ifo Institute for Economic Research.

The figure equals 1.8% of Germany’s economic output, said a report released by the institute on Tuesday.

The country lost €35 billion last year and is expected to see another €9 billion in losses next year.

“Together, this gives us a real income loss over those three years of almost €110 billion, or 3% of annual economic output,” said Timo Wollmershauser, head of forecasts at Ifo.

“The only time this figure was higher was during the second oil crisis of 1979-81, when the loss in economic output was 4%,” he added.

He warned that the current decline in real income is expected to persist over the next few years.

“First, losing Russia as a supplier means that energy prices will likely remain high for the long term. Second, Germany won’t free itself from its dependency on energy imports overnight,” said Wollmershauser.

According to official preliminary estimates, Germany’s annual inflation hit a new all-time high of 10.4% in October, largely driven by a 43% annual jump in energy costs.