KfW Business Cycle Compass November 2022

Dwindling purchasing power, enormous uncertainty, rising interest rates and a weak global economy are weighing on economic activity in Germany. After growing by 1.7% in 2022, GDP will contract by 1.0% in 2023. The very steep rises in energy prices due to the war are increasingly filtering through. Inflation will be a very high 8.8% in 2022 and only dip to 6.2% on average across the year 2023. Greenhouse gas emissions will decline, but the drop will be 6% and 5% below the policy target in 2022 and 2023, respectively, as shown by our new indicator, the Ecological Price Tag for GDP. The euro area economy will grow by 3.3% in 2022, and GDP will stagnate in 2023. Given the multiple crisis situation, upward and downward forecasting risks are significantly larger than usual.

KfW Business Cycle Compass November 2022(PDF, 172 KB, accessible)