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Study: Ukraine war costs German economy hundreds of billions of euros

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Title: Study: The War in Ukraine Cost the German Economy Hundreds of Billions of Euros

The war in Ukraine is approaching its second anniversary, and a recent study conducted by the German Economic Research Institute has revealed the substantial economic impact of the conflict on Germany. The study indicates that the direct economic losses caused by the war in Ukraine to Germany have exceeded 200 billion euros, with estimates showing that the losses will continue to expand.

Marcel Fratzscher, the director of the German Economic Institute (DIW), highlighted the significant economic toll of the ongoing war. The study predicts that the war in Ukraine will cost Germany 100 billion euros in economic losses in 2022, and the losses are expected to increase to 140 billion euros in 2023.

The negative consequences of the COVID-19 pandemic on the economy have not entirely subsided, making it challenging to accurately define the respective effects of the epidemic and the war. The study estimates that, taking into account the COVID-19 epidemic and geopolitical factors, including the war in Ukraine and conflicts in the Middle East, Germany’s economy has lost 4 percentage points of growth since the beginning of 2020. This has resulted in a reduction in household consumption totaling 400 billion euros in 2022 and 2023, equivalent to a reduction in consumption of 4,800 euros per German resident.

The economic repercussions of the war have been particularly burdensome on lower-income earners, as they tend to experience a relative inflation two to three times higher than higher-income earners, according to Fratzscher.

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In addition to the financial and economic losses, the war in Ukraine has had a significant humanitarian impact, resulting in serious casualties and displacing a large number of people. Moreover, the conflict has also led to a high amount of weapons aid, further exacerbating the situation.

As the war in Ukraine continues to unfold, and with geopolitical tensions affecting global economic stability, the study emphasizes the uncertainty surrounding the economic outlook. The International Monetary Fund predicts slower global growth in the wake of these complex geopolitical and economic challenges.

The devastating impact of the war in Ukraine highlights the urgent need for diplomatic solutions to resolve ongoing conflicts and mitigate their far-reaching economic and humanitarian consequences.

(Author: Deutsche Welle. Contact information and copyright statement provided by Deutsche Welle.)

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