A study issued by the Institute for Employment Research (Institut für Arbeitsmarkt- und Berufsforschung, IAB), published on Tuesday confirmed that Germany’s price-adjusted gross domestic product (GDP) will fall by 1.7% next year and that the number of jobs will fall by about 240,000 workers.
“Germany’s economy will lose more than 260 billion euros ($265 billion) in added value by 2030 due to the high energy prices, and the Ukraine war,” IAB added.
The level of employment is expected to remain at this level until 2026, until the expansionary measures gradually begin to overcome the negative effects, and lead to an increase in jobs by about 60,000 by 2030.
According to the study, one of the biggest losers is the hospitality sector, which has already been hit hard by the pandemic, and which is likely to be affected by the weak purchasing power of consumers due to high inflation, in addition to energy. Heavy sectors, such as the chemical industry and metal production, are likely to be significantly affected.
The study found, that under a darker scenario, if energy prices doubled, Germany’s GDP for 2023 would fall by about 4% compared to the “peace in Europe” scenario, according to the institute.
The institute added that under the scenario of a double increase in energy prices, employment in Germany will shrink by 660,000 people after three years.
It is noteworthy that energy prices in Germany have risen by 160% so far.