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Germany expects recession and higher inflation due to the war in Ukraine


The German Institute for Economic Research expects the economy to decline and prices to rise even more as a result of the war in Ukraine.

DIW President Fratzscher told the Neue Osnabrücker Zeitung that he expected the German economy to slide into a recession in the first and second quarters. At the same time, he assumes that inflation will accelerate at rates well above five percent. So far, not all price increases and higher costs have been passed on to consumers. In the event of an escalation of the war and ever new sanctions, it could even go towards ten percent, warned Fratzscher. It is not only about energy prices, but also about supply chains of raw materials and food.

It could therefore -quote- "be very, very difficult for consumers in the coming months".

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