"New calculations of IW quantify the losses that can be expected as early as in 2023. According to those, the cost of the war in Ukraine and all related economic threats will amount to some 175 billion euros. Adjusted for price changes, it accounts for around 4.5% of the GDP," the statement read.
According to the study, German economic losses from the Ukrainian conflict and the COVID-19 pandemic would amount to a total of 595 billion euros, compared to a situation with no conflict in Ukraine and no resulting hikes in energy prices.
Among the main factors, the study listed:
security of energy supplies;
high prices for gas and electricity;
decreasing consumer demand.
"This extraordinary situation will be a challenge to us in the coming months and will be a burden for prosperity," IW expert Michael Groemling said in the statement.
Russia launched its special military operation in Ukraine on February 24, after the Donetsk and Lugansk people’s republics appealed for help in defending themselves against Ukrainian provocations. In response to Russia’s operation, Western countries have rolled out a comprehensive sanctions campaign against Moscow and have been supplying weapons to Ukraine.