German economy to narrow by 0.4% in 2023, ifo forecasts

Unemployment rate likely to increase to 5.6% in 2023, from 5.3% in 2022, shows ifo institute's report

By Gokhan Ergocun

ISTANBUL (AA) – The German economy, which entered recession after contracting in the last quarter of 2022 and the first quarter of 2023, is expected to narrow by 0.4% this year, the ifo institute said on Thursday.

The institute also expected that the country’s unemployment rate would increase to 5.6% in 2023, from 5.3% in 2022.

The inflation rate is expected to be 6% in 2023, down from 6.9% in 2022, the institute's report showed.

"High inflation eroded the purchasing power of private households and prompted the European Central Bank to raise key interest rates sharply," it noted.

"Consumer spending and construction activity suffered as a result, as real household incomes fell and financing costs rose."

Kaynak:

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