IMF sees tepid German recovery ‘but risks are skewed downward’
2022.05.23 14:21
FILE PHOTO: General view of the “Grosse Bergstrasse” street during a lockdown in Hamburg, Germany May 11, 2021. REUTERS/Fabian Bimmer
BERLIN (Reuters) – The German economy, Europe’s largest, is on track for a tepid economic recovery but risks are tilted to the downside and fiscal policy should be flexible in an uncertain environment, the International Monetary Fund said on Monday.
In a statement after a mission to Germany, the IMF said it projected growth to slow to about 2% in 2022, picking up in 2023 to slightly above 2% if energy prices and supply bottlenecks subside, and COVID-19 infections remain under control.
“Growth would then decline toward potential after 2024,” the IMF said in its so-called Article IV report.
“Output would remain below the pre-pandemic trend in the medium term, given headwinds from elevated energy prices to private investment, weaker external demand, and greater economic and geopolitical uncertainty following the war,” it added.
