The consequences of the Ukraine war are far-reaching. The war could have immense effects on the German economy and growth. Three research institutes predict a high loss of added value.
The Ukraine war and its consequences could cost the German economy more than 260 billion euros in added value by 2030. According to a study published by several institutes on Tuesday, the conflict is also damaging employment: in the coming year, around 240,000 fewer people could be employed than without the war. The average for the years 2022 to 2028 would be 150,000 people.
In addition to the Institute for Labor Market and Vocational Research, the Federal Institute for Vocational Training and the Society for Economic Structure Research were also involved in the study. For their forecast, the researchers assumed that the sanctions against Russia would remain in place until 2030, even if the war ended by then.
"Because of the effects of the war, the post-Corona upswing has failed," explained Enzo Weber from the IAB. The researchers see the increased prices for fossil raw materials as the most important braking factor in their report. These weighed on the export economy and the consumption options of private households. The study predicts the strongest effects on the labor market in the hospitality industry, in social services and in food production. However, they decrease over the years. For 2030, the study even sees a positive effect of 60,000 employees.
However, this only applies to the assumption that energy prices do not rise even higher. Should this happen, Germany would slip into recession, Weber warned. In a scenario with energy prices rising twice as fast, the researchers see the greatest impact on the labor market in 2024, with 660,000 fewer workers than without the war.
