The “economic wise” are pessimistic.. the repercussions of the war lower growth expectations


Germany’s “economic wise” is expected to cut significantly their growth forecasts for Europe’s largest economy due to the fallout from the Ukraine war.
It is noteworthy that the name “economic sages” is a colloquial term for an advisory body affiliated to the German Council of Ministers, and the official name of the body that includes senior
Economists are the “Council of Experts for the Evaluation of Comprehensive Economic Development” and this body advises the German government regarding
in economic affairs.
Today, Wednesday, the Council is expected to present its updated economic forecasts for the years 2022 and 2023. Various institutes have recently lowered their growth forecasts for the German economy as companies struggle with supply bottlenecks and high energy prices.
The “economic wise” had expected last November that the German economy would achieve a growth of 4.6 percent this year.
In addition, experts from the German “Hans-Böckler” Foundation expected in a “basic scenario” that they prepared for the current year, that the German economy would achieve a growth of only 2.1 percent, due to the Ukraine war and the rise in energy prices.
The union-linked institution’s Institute for Macroeconomics and Economic Research (IMK) said in its December forecast that Europe’s largest economy would grow 4.5 per cent.
The researchers expected the value of the inflation rate to reach 6.2 percent, mainly due to the significant rise in energy prices and the repercussions of supply chain bottlenecks.
According to “Al Almanya”, the institute announced yesterday that it expects an increase in the number of workers and a decrease in the annual average unemployment rate from 5.7 percent to 4.9 percent.
For his part, the scientific director of the institute, Sebastian Dolin, said that the war impeded the course of economic recovery, “and this applied to many countries, but it affected Germany in particular.”
The economic picture for 2022 is currently dominated by tragic rises in energy prices, exceptionally high rates of inflation, new burdens on supply chains, and major disruptions. These factors have hampered private consumption, foreign trade, and investment readiness, Doolin said.
“This year we will see moderate growth at best rather than a dynamic recovery,” Dolin concluded.
In addition, the German Environment Ministry yesterday laid out a plan to improve the country’s natural defenses against climate change.
The plan provides for allocating four billion euros until 2026 to protect and restore natural ecosystems such as forests, floodplains, soils and swamps, which store more greenhouse gases and contribute to mitigating climate change.
Yesterday, Environment Minister Stefa Lemke announced the main points of the plan, which also included re-wetting peat soils, establishing marine reserves and taking measures to combat logging in public forests.
The funds allocated to this plan will also be used to provide financial support to farmers who choose, for example, not to use or drain peat soil.
Lemke acknowledged that there is “extreme tension” between construction projects and the renewal of nature, stressing the importance of this, adding that it is time “to stop working against nature, and to use the synergies that already exist between nature and climate change in a meaningful way.”
Lemke explained that drained peatlands, for example, do not store greenhouse gases, but instead emit large amounts of carbon dioxide.
The main points of the plan are to be coordinated with other ministries, and the final plan is expected to be ready by the end of the year.

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