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Germany's businesses outlook reveals a 40% decline, 30% stagnation

  • By Al Mayadeen English
  • Source: Agencies
  • 9 Jan 2023 13:08
  • 1 Shares
2 Min Read

German Economic Institute survey reveals that only 25% of the German businesses surveyed will probably face growth.

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  • A German flag flutters in front of the Reichstag building in Berlin, Germany, September 6, 2020 (Reuters).
    A German flag flutters in front of the Reichstag building in Berlin, Germany, September 6, 2020 (Reuters).

A new suvey by the German Economic Institute (IW) revealed that high energy costs, supply chain problems, and the ongoing war in Ukraine, are behind the 2023 business shrink expected in four out of ten German companies. 

Accodig to the IW report, "The risk of a gas shortage in the 2022/23 winter season is no longer as present as it was in the summer of 2022, and energy prices have also retreated since then. However, they remain at a high level and production disruptions cannot be ruled out."

The report furher noted that throughout 2023, it will become clear "how extensive gas and energy supply can be built up for the next winter and the extent of any possible disruptions that could occur in 2023."

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A poll of nearly 2,500 businesses revealed that, in addition to the 40% decline, nearly a third of businesses anticipate production stagnation, while the remaining 25% anticipate growth.

According to the International Monetary Fund (IMF), Germany's economy, which is the largest in Europe, is expected to contract by 0.3% next year, the highest among the G7 countries, as a result of an abrupt stoppage of gas shipments from Russia, its former primary supplier.

It reports that the abrupt cessation of gas deliveries from Russia, its previous primary energy source, will cause Germany's economy, the largest in Europe, to contract by 0.3% next year, the worst across the G7 countries.

Read more: Germany could become 'bankrupt state' due to energy spending: Berlin

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