Pak Sahafat – Due to the increasing decrease in gas supply from Russia and the increase in energy prices in Germany, economists believe that high inflation and disruption in energy supply and the fear of its interruption will push Europe’s largest economy into a big storm.
According to Pak Sahafat News Agency’s report, quoting from the website of “Financial Times” newspaper Currently, investors are more pessimistic about the German economy than at any time in more than a decade and are worried that the increasing decrease in gas imports from Russia and the increase in energy prices will lead to a recession in this country.
ZEW economic research institute for Germany as Europe’s largest economy says that the index of investor expectations fell to its lowest level since 2011 and reached from minus 53.8 to minus 55.3, which indicates the worsening of Germany’s economic situation as one of the consequences of Russia’s attack on Ukraine.
This institute reported the first signs of severe economic recession in Germany following the suspension of Russian gas supply through the “Nord Stream 1” pipeline; an interruption that, after the repairs, led to the resumption of gas exports, but with a fifth of the capacity.
Observing the current situation, economists have reduced their estimates of economic growth in Germany and the Eurozone and increased inflation forecasts and warned that the end of gas imports from Russia will force the Berlin government to ration energy for industrial units.
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According to reports, Germany’s basic electricity for delivery next year, which is the benchmark price in Europe, has increased by more than 5% and reached a record of 502 euros per megawatt hour. This price is 6 times higher than the price of the same period last year, which indicates that gas is more expensive and, as a result, more expensive electricity production and disruption in production.
The increase in energy prices, in addition to disrupting production, has also increased the cost of imports for Germany and other countries in the Eurozone, and has increased the trade deficit of this region to 24.6 billion euros in June. Meanwhile, in the same period last year, this country had a trade surplus of 17.2 billion euros.
Carsten Brzeski, head of macro research at the Dutch bank ING, believes that the German economy is quickly approaching a perfect storm. He attributed this to high inflation and current disruptions in energy supply and the fear of sudden gas cuts.
A senior German energy official told the Financial Times in this regard that the Berlin government should reduce gas consumption to a fifth in order to avoid severe energy shortages in winter. The German Ministry of Economy has ordered all companies and local authorities to set the minimum temperature of the office room to 19 degrees Celsius.
Earlier, following the reduction of Russian gas supply due to the imposition of Western sanctions against Moscow, the head of the German gas and electricity network department said that German citizens should reduce their consumption by at least 20% in order not to face gas shortages in the winter season.