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BERLIN, March 4 (Reuters) – Rating agency Scope cut its 2022 growth forecast for the German economy to 3.5% from 4.4% following Russia’s invasion of Ukraine, it said on Friday.
“Germany’s growth outlook is deteriorating as the impact of the Russia-Ukraine conflict exacerbates existing supply chain disruptions and inflationary pressures,” Scope said in its new outlook.
It sees German GDP growth at 2.7% in 2023.
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The direct consequences for foreign trade following the sanctions imposed on Russia have been manageable so far, Scope said.
“However, Germany’s export-oriented economy and the dependence of exporters on international suppliers implies that the war in Ukraine will lead to further disruptions,” Scope expert Eiko Sievert said. The automotive sector is likely to be particularly affected, he added.
War and sanctions are also likely to increase inflationary pressures, Scope said.
“German households are already facing the highest electricity prices in the EU, and as in most other European economies, prices are continuing to rise,” it said.
“The risk of further escalation and tougher sanctions in the energy sector remains.”
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Reporting by Rene Wagner; Writing by Maria Sheahan; editing by John Stonestreet
Our Standards: The Thomson Reuters Trust Principles.
Register now for FREE unlimited access to Reuters.comBERLIN, March 4 (Reuters) – Rating agency Scope cut its 2022 growth forecast for the German economy to 3.5% from 4.4% following Russia’s invasion of Ukraine, it said on Friday.”Germany’s growth outlook is deteriorating as the impact of the Russia-Ukraine conflict exacerbates existing supply chain disruptions and inflationary pressures,” Scope said in its new outlook.It sees German GDP growth at 2.7% in 2023.Register now for FREE unlimited access to Reuters.comThe direct consequences for foreign trade following the sanctions imposed on Russia have been manageable so far, Scope said.”However, Germany’s export-oriented economy and the dependence of exporters on international suppliers implies that the war in Ukraine will lead to further disruptions,” Scope expert Eiko Sievert said. The automotive sector is likely to be particularly affected, he added.War and sanctions are also likely to increase inflationary pressures, Scope said.”German households are already facing the highest electricity prices in the EU, and as in most other European economies, prices are continuing to rise,” it said.”The risk of further escalation and tougher sanctions in the energy sector remains.”Register now for FREE unlimited access to Reuters.comReporting by Rene Wagner; Writing by Maria Sheahan; editing by John StonestreetOur Standards: The Thomson Reuters Trust Principles.