On Thursday, the federal government declared the alarm level in the gas emergency plan. Companies are worried about the next few months, especially those that are particularly dependent on gas imports.
The mood in the German economy clouded over noticeably in June due to concerns about the energy supply. The Ifo business climate fell by 0.7 points to 92.3 points in a monthly comparison, as announced by the Ifo Institute in Munich. Analysts had expected a downturn, but only a slight one to 92.8 points.
“Rising energy prices and the impending gas shortage are causing great concern for the German economy,” commented Ifo President Clemens Fuest. On Thursday, the federal government declared the alarm level in the gas emergency plan. The reason is a sharp reduction in gas supplies by Russia. Economists warn of significant consequences for the German economy should Russian gas supplies fail completely.
«Chemical industry is extremely concerned»
The mood in industry and trade was gloomy. “The chemical industry in particular is extremely concerned,” said Fuest. In chemistry, the use of gas is of great importance. Wholesalers and retailers are also “extremely worried” about the coming months. The service providers and the construction industry, on the other hand, were somewhat more confident. “The hospitality industry is having a good summer.”
Bank economists assessed the deterioration in sentiment due to the economic problems as moderate. “In view of an endangered energy supply, record-high inflation rates and disrupted production chains, it is amazing that the mood in companies is staying at this level,” said Ulrich Kater, chief economist at Dekabank. “The deterioration in expectations clearly shows that the main challenge for companies is the energy supply in the coming winter.” All in all, the German economy can probably do no more than stagnate this year.
Jörg Krämer, chief economist at Commerzbank, was also pessimistic. “In fact, the economic situation is unstable.” On the one hand, a further reduction in Russian gas supplies could lead to gas rationing in industry with serious consequences. On the other hand, the interest rate hikes by the US Federal Reserve are likely to trigger a recession in the coming year. As a result, Commerzbank has reduced its growth forecast for Germany from 2.5 to 1.0 percent in the coming year. For this year, the Commerzbank economists continue to expect growth of 1.5 percent.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
