According to recent forecasts for the euro are, real GDP (gross domestic product) growth is expected to fall from 3.1% in 2022 to 0.9% in 2023 (ECB (European Central Bank) 2022a). Uncertainty and downside risks are high. In Germany, we may expect a recession in the sense of a marked, broad-based and longer lasting decline in economic output.
Downside risks to macroeconomic development are increasing in Germany, which is reflected in recent declines in the growth-at-risk measure (Figure 2).