With the start of the heating season, the utility bills for many Germans are likely to skyrocket. But the winter of 2023 could be even harder, warns IMF Deputy Director Gopinath. As an industrial location, Germany would feel the shocks particularly badly.
According to the International Monetary Fund (IMF), Germany will still have to struggle with the energy crisis for a long time. “This winter will be difficult, but the winter of 2023 could be even worse,” IMF Deputy Director Gita Gopinath told the “Handelsblatt”. “The energy crisis will not disappear so quickly, energy prices will remain high for a long time.”
At the same time, the IMF deputy head praised the course taken by Federal Finance Minister Christian Lindner, who wants to end the expansive fiscal policy and comply with the debt brake again. “I think the finance minister’s approach is correct,” said Gopinath. Inflation is at its highest level in decades. “Everything must be done here to lower inflation,” said the economist. The European Central Bank is increasing its interest rates, but financial policy must also make its contribution. “That’s why our advice is to refrain from an expansive fiscal policy.”
The IMF Deputy Head sees Germany particularly affected by the current global growth weakness. Germany has a larger industrial sector than other countries. “And these companies were already struggling with the interrupted supply chains during the corona pandemic, and now there are the rapidly increasing energy costs,” said Gopinath. “Germany is an industrial location and is therefore currently feeling the effects of these shocks particularly clearly.” The expansion of renewable energies must be significantly accelerated. And it needs energy supplies from other countries that are reliable. The federal government is working on both, and that is necessary,” said Gopinath.
The IMF lowered its growth forecast for Germany last week. Unlike France, Spain and Great Britain, for example, the IMF expects economic output to shrink in Germany in 2023 – specifically by minus 0.3 percent. The estimate from July was thus reduced by 1.1 percentage points.