BERLIN (AP) – German business confidence fell more-than-expected this month, hitting a two-year low on concerns about higher energy prices and a possible gas shortage, according to a closely-watched survey on Monday.
The Ifo Institute said the monthly confidence index, a leading indicator for Europe’s largest economy, fell to 88.6 in July from 92.2 the previous month. This was the second consecutive decline and the index hit its lowest level since June 2020. Economists had forecast a drop to 90.1.
The decline was due to the company’s worsening guidance for the next six months, but they are also unhappy with their current position.
“Companies expect things to be more difficult in the coming months,” Ifo said in a statement. Said. “High energy prices and the threat of gas shortages weigh on the economy. Germany is on the verge of recession.”
Natural gas deliveries from Russia to Germany via the Nord Stream 1 gas pipeline resumed on schedule last week after a 10-day maintenance interruption, but were still at 40% of full capacity, as it had been since mid-June. The outlook for supplies from Russia, which recently accounts for about a third of Germany’s gas supply, is uncertain.
The German government has announced that it will increase gas storage requirements and take additional measures to save gas used for energy, electricity generation and home heating in winter.
And on Friday, it announced a bailout for energy supplier Uniper, in which it will buy a 30% stake. One of the consequences will be higher prices for customers, whose impact the authorities have promised to reduce.
The Ifo survey is based on responses from nearly 9,000 companies in various business sectors.
Source: Breitbart
