The war in Ukraine will cost the German economy EUR 175 billion in 2023.
That's according to the Cologne Institute for Economic Research, Ukrinform reports.
"The war in Ukraine and all the economic threats associated with it will cost around 175 billion euros in added value. Adjusted for prices, this corresponds to around 4.5 percent of GDP," the study reads.
According to the report, this corresponds to a loss of prosperity of 2,000 euros per inhabitant of Germany.
In the past three years, Germans have had to accept enormous losses in prosperity, as the calculations show: the pandemic year 2020 already saw a loss of value added of EUR 175 billion as a result of lockdowns and uncertainty. In 2021, there was another GDP loss of EUR 125 billion. For 2022, losses are likely to have amounted to almost EUR 120 billion. In total, the production losses will add up to EUR 595 billion by the end of 2023.
Germany is still in a crisis mode as the pandemic crisis has turned into a crisis of the Russian war in Ukraine. At the same time, experts identified various war-related problems. Among them are danger in the field of energy, in particular, the threat of disruptions and emergencies in critical infrastructure; high costs not only for electricity and gas, but also for upstream services and raw materials, which threatens competitiveness. As a result, when in doubt, companies decide against planned investments.
At the same time, the situation is also having a negative effect on buyers: private households are asking for fewer goods.
"The situation is still very fragile. The exceptional situation will keep us busy in the coming months and will weigh on prosperity," said IW economist Michael Grömling.