Media Releases

As two of 427 "Young Economists" from 69 countries, Felix Meier and Saskia Meuchelböck have been selected to participate in the 7th Lindau Meeting of Economic Sciences. The prestigious meeting is scheduled for August 2022 in Lindau at Lake Constance.

The U.S. has become by far the top supporter of Ukraine with its latest aid pledges. European support pledges to the Russian-attacked country have been growing more modestly recently, according to data collected in the Ukraine Support Tracker. The already strikingly high commitment of Eastern European countries becomes even more obvious when costs for refugees are taken into account.

After a turbulent start of the year, caused primarily by Russia's invasion of Ukraine, trade in goods stabilized in April in numerous economies. According to the latest data update of the Kiel Trade Indicator, global trade is clearly up on the previous month (price and seasonally adjusted). The last time there was a comparable increase was in January, before the outbreak of war. The negative consequences of the Shanghai lockdown remain manageable. Congestion in container shipping remains at a high level.

Other countries' support pledges to Ukraine have grown steadily in the second month since the outbreak of war. EU countries, among others, have increased their efforts and, overall, are currently matching the U.S. performance since the end of January, according to data collected in the Ukraine Support Tracker. The commitments by Germany and Poland increased the most among all 31 donor countries, while little new support came from France, Spain, or Italy

Support by other countries to Ukraine since the outbreak of war has been distributed very unevenly, with the United States, Eastern European countries and Great Britain standing out as particularly supportive. This is shown by data of the Ukraine Support Tracker, a new database of government support to Ukraine compiled by researchers at the Kiel Institute for the World Economy.

The German economy is steering through difficult waters and faces the highest inflation rates in decades. In their spring report, the leading German economic research institutes revise their outlook for this year significantly downward. The recovery from the COVID-19 crisis is slowing down as a result of the war in Ukraine, but remains on track. The institutes expect GDP to increase by 2.7 and 3.1 percent in 2022 and 2023 respectively. In the event of an immediate interruption to Russian gas supplies, a total of 220 billion euros in German economic output would be at risk in both years.

The winners of the Global Economy Prize 2022 have been officially named. The theme of this year's award is "Location policy between state and market." The Global Economy Prize is intended to provide an impetus to overcome the major global economic challenges by transcending borders. It is not endowed.

After more than a month of war in Ukraine, the negative consequences for global trade are now becoming clear. According to the latest data update of the Kiel Trade Indicator, the conflict is weighing on the trade data of almost all economies and also clearly on global trade overall (month-on-month, price and seasonally adjusted). Russia's increasing isolation is reflected in an abrupt decline in the number of container ships arriving and departing from its ports. Globally, the number of shipping containers in congestion is increasing again.

Russia’s invasion of Ukraine threatens food security in Africa. The supply of grain is likely to deteriorate permanently and become more expensive for many African countries. Should Russian grain exports decrease substantially, for example because the country imposes an export ban, some of the poorest countries would probably face a serious hunger crisis. This is shown by current model calculations by the Kiel Institute.

The Kiel Institute is expanding its international trade focus with the appointment of a new professor who will conduct research on global container shipping and global supply chains, among other topics. Inga Heiland (35) will take over both the management of a research center for trade related topics at the Kiel Institute for the World Economy and an economics professorship at Kiel University on April 1, 2022

The war in Ukraine is putting a noticeable strain on the German economy and increases the already strong inflationary pressure. However, the recovery is not breaking off. In its latest spring forecast, the Kiel Institute almost halves its forecast for economic output growth in Germany in the current year. It now expects only 2.1 percent (previously 4 percent). The inflation rate is expected to rise to 5.8 percent, the highest since reunification.

The war in Ukraine could significantly worsen the supply of cereals used in food production in African countries, making food more expensive if Ukraine ceases to be a grain supplier. The country supplies large quantities of grain to North African states in particular, which other sources of supply could not replace even in the long run. The consequences would also be felt in Germany, albeit far less dramatically. This is shown by current model calculations by the Kiel Institute.

The war in the Ukraine already affected international trade in February, although the conflict escalated only a few days before the end of the month. According to the latest data update of the Kiel Trade Indicator, global trade is declining significantly compared with the previous month (price and seasonally adjusted), and the signs are negative for almost all economies. Russian exports in particular are expected to slump sharply. The Ukraine is largely cut off from international maritime trade, there are practically no more calls at the Black Sea port of Odessa.

In the long term, the Russian economy would be much more severely affected by a decoupling of its trade relations from the US and its partners than those of the allies. According to a simulation, Russia's economic output would be almost ten percent lower annually in the long term than if trade relations remained unchanged. The allies, on the other hand, would suffer much smaller losses over this time horizon.

Calculations by the Kiel Institute show which trade sanctions would hit the Russian economy the hardest. A trade stop with gas would result in a slump in Russian economic output of just under 3 percent, while a trade stop with oil would result in a slump of a good 1 percent. For Germany and the EU, there would hardly be any economic damage.

German companies are increasingly investing abroad in China. This is particularly true in the manufacturing sector, such as the automotive industry. US companies, on the other hand, are largely staying away from the country. ”German companies are on the path to critical dependence on the goodwill of the Chinese leadership. They serve China's geopolitical claim to power when they transfer their know-how to the country, and they can be squeezed out by domestic firms,” said Rolf J. Langhammer, a trade expert at the Kiel Institute, on the occasion of a recent analysis.

Despite ongoing congestions in container shipping, global trade is up in January compared with the previous month and has now even surpassed its pre-crisis level (price and seasonally adjusted). This follows from the latest data update of the Kiel Trade Indicator. In terms of trade in goods, the Omicron wave has so far primarily posed a threat to the Chinese economy. Currently, around 11 percent of all goods shipped worldwide are stuck in traffic jams, and around 11 percent fewer goods than usual are being moved in the Red Sea.

Sovereign defaults on Chinese debts are frequent but, due to the opacity of China's lending, data on these defaults is scarce. A new study involving the Kiel Institute shows that restructurings with Chinese lenders now surpass the number of restructurings with other creditors such as private bondholders. Chinese creditors also rarely grant debt relief in the event of payment difficulties. Many developing countries could therefore face a decade of recurring crises and debt rescheduling.

Populist governments perform worse than non-populist governments in handling the COVID-19 pandemic and its consequences. This applies, for example, to countries such as the United Kingdom, Hungary, and India. Excess mortality—the number of deaths above those that could be expected even without the pandemic—is more than twice as high on average in populist governed countries than in non-populist governed countries. This is shown in a research paper with involvement of the Kiel Institute.

In contrast to the first major wave of the pandemic, world trade has so far not shown any negative swings in the face of the Omicron variant rampant in many countries. Following the latest data update, the Kiel Trade Indicator signals a slight increase in global trade (0.8 %). Overall, however, the single indicators continue to show a mixed picture for trade flows. A strong catch-up process is not visible in the data. Large volumes of goods can still only be handled with delay at the seaports.

Supply bottlenecks and the fourth Covid-19 wave are weighing on Germany's recovery, delaying the catching-up process by several months. The Kiel Institute for the World Economy now expects gross domestic product (GDP) to grow by 2.6 percent this year, but only by 4 percent in 2022 (previously 5.1 percent). In 2023, however, the upturn is expected to be steeper at 3.3 percent (previously 2.3 percent). The inflation rate is likely to exceed 3 percent this year and next, and the budget deficit will remain high due to modified debt brake rules.

In its latest data update for November 2021, the Kiel Trade Indicator signals fairly positive trade figures overall (month-to-month, price and seasonally adjusted). However, the upward movement threatens to be short-lived: China is sheering out with negative numbers. And congestion in container shipping remains at a decidedly high level and thus stands in the way of a longer-term upward trend. With this data update, the Kiel Institute introduces a number of improvements for the Kiel Trade Indicator, the most important of which is that from now on the estimates will be price-adjusted.

Professors Holger Görg and Stefan Kooths will take over the scientific management of the Kiel Institute for the World Economy (Kiel Institute) from 1 December 2021 until the succession of the retired institute President Prof. Gabriel Felbermayr is settled. A corresponding interim arrangement has now been approved by the Institute's Board of Trustees as well as by the State of Schleswig-Holstein and the Federal Government as the bodies responsible for financing the Institute.

World trade remains short on its growth potential, but there are increasing positive indications. The Kiel Trade Indicator currently shows some slightly positive values. Congestion at major seaports is reducing somewhat, but the situation there remains very volatile. A sustained solution to supply chain disruptions is not yet in sight.