Prosperity : lean years for Germany and Lithuania

 

Why Lithuania? After Lithuania decoupled from Russia, Lithuania coupled to Germany.  If Germany is hurting, Lithuania is hurting as well. Germany is hurting a lot: 

 

"Politicians are swearing the population into a hard winter. Unfortunately, the economic problems only really are starting after that.

This winter will be tough, but after that everything will be better again. It sounds something like this when the chancellor and his ministers swear the Germans to face difficult months. The problem with this: The motto is wrong, or at least only partially. Yes, the risk of blackouts and lack of gas is greater in winter than usual, the cold season is particularly tricky. 

However, it is by no means the case that Germany will flourish economically in the spring of 2023 and that people's financial worries will then suddenly disappear.

On the contrary, the vast majority of economic researchers are now forecasting a shrinking economy in the coming year and an almost double-digit inflation rate. That would be a much more than this year and a dampener for all those average earners who had hoped not to have to really deal with the question of whether they need to tighten their belts.

Although the inflation forecasts are fraught with uncertainty, they are far more than just poking around in the fog. Because on the futures markets for electricity and gas, high prices can already be read up to the year 2024, which will eat through the production of steel, rolls, paper or other goods to the consumers.

The consequences will be more permanent than many realize today. Economic researchers from Kiel published a long-term forecast on Monday, according to which the so-called potential growth of the German economy will shrink to just 0.7 percent a year in 2027. This number shows how much gross domestic product can grow with normal utilization of production capacities - before the Corona crisis it was twice as high.

In addition to the unfavorable demographic development, expensive energy is now also spoiling growth prospects. "If growth dwindles, the source of increases in prosperity dwindles and economic distribution conflicts increase," says the analysis. That's the truth that belongs on the table. Otherwise the frustration after the winter of hardship will only be greater.”