An increase in the cost of energy will cost the German economy nearly 110 billion euros, or 3% of GDP, during the period from 2021 to 2023, writes MarketWatch citing, assessing the Munich Institute for Economic Research Ifo.

The increase in energy prices was more sensitive to the German economy only during the 1979-81 crisis, when it took 4 percent of the country’s GDP, said Timo Vollmerhäuser, head of Ifo’s forecasting department.

The main damage of 64 billion euros will occur in 2022, economists believe. In 2021, the damage was 35 billion euros, and in 2023 it is expected to be 9 billion euros, according to Ifo estimates.

Why are energy prices going up? The impact of the energy crisis on Germany’s real income will be felt for several years as Russia’s exclusion from the supply chain translates into high energy prices in the long term, Wallmerhäuser noted.

German GDP grew 0.3% in the third quarter of 2022 compared to the previous three months and 1.2% year-on year, preliminary data from Germany’s Federal Statistical Office (Destatis) showed.

The German economy will grow by 1.4 percent this year, and shrink by 0.4 percent next year, the country’s economy ministry forecast. In 2024 it is expected to grow by 2.3%.

Earlier we reported that the dollar is getting weaker before data on possible increases in unemployment in the U.S.