According to researchers at the liberal think-tank, the Cologne Institute for Economic Research, the war in Ukraine is estimated to cost the German economy €175 billion – in 2023 alone, equivalent to a whopping 4.5 percent of GDP.
“The war in Ukraine and all the economic threats associated with it will cost around 175 billion euros in added value. Adjusted for prices, this corresponds to around 4.5 percent of GDP”, the researchers conclude in the report.
This enormous sum is equivalent to about €2,000 per German citizen.
It can be noted that already in the previous three years Germans had to accept huge economic losses as a result of political decisions. The lockdown policy during the corona crisis is estimated to have cost the country €175 billion in 2020 and €125 billion in GDP losses in 2021, last year the economic losses for these are estimated to have landed at around €120 billion.
Total output losses, calculated since the start of the corona policy, are estimated to reach a staggering €595 billion by the end of 2023 – around €7000 per inhabitant in Germany.
It notes that Germany is still in a state of crisis and that the corona crisis has turned into a new crisis due to the ongoing war in Ukraine and the blowing up of Nord Stream, where the energy sector is under threat and there is a risk of disruptions and emergencies in critical infrastructure.
The sharp rise in costs – not only for electricity and gas – but also for raw materials and suppliers threatens German competitiveness and makes few German companies dare to carry out planned investments.
At the same time, the situation is having a very negative impact on the German private economy. Households are not buying as much as before and are choosing to hold on to their money to a greater extent – which has a further negative impact on the whole economy.
– The situation is still very fragile. The exceptional situation will keep us busy in the coming months and will weigh on prosperity, comments economist Michael Grömling.