The crises of recent years have cost Germany almost a trillion euros. This emerges from a study by the German Economic Institute (IW). The costs therefore consist of the loss of economic output since 2020. The reason for this was several critical developments such as the corona pandemic, the Russian attack on Ukraine and the “confrontational policy” of the USA under President Donald Trump.
According to the study, the loss of value added per employee was more than 20,000 euros. “The current decade has so far been characterized by extraordinary shocks and enormous economic adjustment burdens, which now significantly exceed the level of burdens of previous crises,” writes the IW. The result for Germany is stagnation. The country’s overall economic performance has barely increased since 2019.
According to the IW, in the six years of the crisis there was a loss in economic output of a total of 940 billion euros, adjusted for prices. Mainly because of the corona pandemic, there was a loss of 185 billion euros in 2020, and in 2021 there was a loss of around 100 billion euros.
Record losses
Table of Contents
From 2022 onwards, further crisis factors will be added with the war in Ukraine and the overall geopolitically burdened global economy. According to the IW model calculation, the defaults will amount to 75 billion euros in 2022, 140 billion euros in 2023 and over 200 billion euros in 2024. According to IW, the stagnation that will continue in 2025 will result in a maximum loss of 235 billion euros.
The institute’s calculations are based on the assumption that without these crises, economic life would have continued to develop at the average pace of the last three decades and would not have slowed down for reasons other than the pandemic and geopolitics. In fact, there has been a “de facto stagnation” in recent years. It is not possible to precisely assign the failures to the individual crisis-related causes, “since the individual crises and their economic consequences have been overlapping since 2022.”
