A new study shows business confidence in Germany hit its lowest level in two years amid worries about rising energy prices and a possible shortage of natural gas.
Monthly confidence index, a key indicator of Europe’s largest economy, fell to 88.6 points in July from 92.2 last month, the second consecutive drop as the index hit its lowest level since June 2020, according to a study by the German Ifo institute. of the year.
Economists had expected a fall to 90.1 points.
“Companies expect business to become more challenging in the coming months,” the Ifo Institute said in a statement, noting that “high energy prices and the threat of gas shortages are weighing on the economy. Germany is on the verge of a recession.”
Notably, Nord Stream 1 natural gas supplies from Russia to Germany resumed on schedule last week after a 10-day maintenance break, but flow remains at just 40 percent of full capacity, as it was from mid-June.
Prospects for future supplies from Russia, which has recently accounted for about a third of Germany’s gas supplies, remain uncertain.
The German government has announced that it will tighten gas storage requirements and take additional measures to secure gas for power generation, power generation and home heating during the winter.
Source: AP