According to estimates by the International Monetary Fund (IMF), the energy crisis will continue to plague Germany for a long time to come. “This winter will be difficult, but the winter of 2023 could be even worse,” IMF Deputy Director Gita Gopinath told the “Handelsblatt” (Monday).
“The energy crisis will not disappear so quickly, energy prices will remain high for a long time. Germany must react to this. The expansion of renewable energies must be significantly accelerated.”
Industrial location Germany suffers particularly
In its most recent economic forecast, the IMF predicts a decline in economic output of 0.3 percent for Germany, Europe’s largest economy, for 2023. “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 the rapidly rising energy costs are added,” explained the economist Gopinath.
“Germany is an industrial location and is therefore currently feeling the effects of these shocks particularly clearly.”
Despite the economic downturn, she thinks the efforts of Federal Finance Minister Christian Lindner (FDP) to comply with the debt brake again are correct. “Yes, I think the finance minister’s approach is correct,” said Gopinath.
“Everything must be done to lower inflation”. The European Central Bank (ECB) is raising interest rates. “But financial policy should also make its contribution. That’s why our advice is to refrain from an expansive fiscal policy,” said the IMF Deputy Director.
