Ifo chief economist expects weaker growth impact despite energy price shock and low water levels

Wollmershäuser summarized this assessment in the words: „Deutliche Impulse aus dem Ausland und die Mehrausgaben für Infrastruktur, Klima und Verteidigung in Deutschland verhindern stärkere Bremsspuren beim Wachstum durch den Energiepreisschock und das Niedrigwasser auf den Flüssen“.

Foreign impulses support the development

The situation is not free of risks. Energy prices and low water levels remain burdens. However, according to the Ifo chief economist, the positive impulses mentioned are preventing these burdens from affecting economic growth even more.

Low water levels in particular are associated with economic disadvantages. Low water levels on German rivers can complicate transport and other economic processes. The available facts cite the possible consequences but do not provide information on individual sectors, regions, or affected waterways.

Low water levels remain a risk

The reviewed information also does not contain precise figures regarding the extent of the additional government spending. It also remains unclear how strongly each of the factors mentioned influences growth. The Ifo chief economist's statement therefore primarily describes the direction and interaction of the influences.

The forecast is therefore less bleak than the burdens alone might suggest. Foreign demand impulses and additional investments are supporting the development. The energy price shock and low water levels are nevertheless acting as a drag.

For further assessment, it will be crucial how sustainable the impulses from abroad turn out to be and whether the additional spending takes effect. The development of energy prices and water levels also remains relevant. The verified information does not cite concrete new figures or a detailed annual forecast.

Open questions about further developments

According to the information, Timo Wollmershäuser is the chief economist of the Ifo. His statement was confirmed with seven sources. The statement on the possible negative economic consequences of low water levels was supported by five sources.