These entities emphasized this opinion in their autumn report. The institutes predict a drastic rise in energy prices, increases in production costs that also lead to increases in other products and inflation levels not seen since the 1970s.
However, they interpreted as a positive factor a certain stability in the labor market where, despite a drop in the demand for labor, companies, in the face of a shortage of personnel, are making efforts to keep their employees.
They point out that the conflict in Ukraine and the resulting crisis in the energy markets due to Western sanctions against Russia led to a clear decline in the German economy.
Torsten Schmidt, an expert in economic analysis at the Leibniz Institute for Economic Studies in Essen (RWI), spoke about these aspects during the presentation of the joint report entitled Energy Crisis: Inflation, Recession, Welfare Loss.
They reflected that high energy and food prices, which will continue to rise in the coming year, lead to a loss of purchasing power.
The joint report involved the RWI Essen, the IWH Halle, the IFO Munich and the Institute for World Economics (IfW) Kiel.
The report is one of the bases from which the German government makes its own economic projections.