Industry President: Economy desperate because of high gas prices

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The economic sanctions against Russia were actually intended to put pressure on Moscow to change its foreign policy. But the sanctions seem to have missed their target by far. Instead, displeasure is brewing in the German economy and population.

Industry President Siegfried Russwurm sees economic growth in Germany more at risk than expected in June. At that time, the Federation of German Industries (BDI) was assuming that economic output would only grow by 1.5 percent in the current year. “But we said back then that growth of 1.5 percent could only be achieved if everything went well. That’s becoming increasingly difficult,” said Russwurm German press agency in Berlin. At the beginning of the year, i.e. before the start of the Ukraine war, the BDI had still assumed an increase of around 3.5 percent.

“It doesn’t just depend on gas prices,” said Russwurm, referring to the sharp rise in prices. “There are other risk factors.” The BDI boss mentioned the significant increase in interest rates in the USA and its consequences for the economic development in Germany’s largest export market as well as the weak economic growth in China.

Media report: Poland and Hungary reject EU gas plan

Media report: Poland and Hungary reject EU gas plan

“People are preparing to pay significantly higher electricity and gas prices and are holding onto the money,” Russwurm noted. “The state will not be able to compensate for all price increases.”

Russwurm expects immense additional costs due to the throttling of Russian gas supplies. For a long time, the gas price was less than 20 euros per megawatt hour. Currently, companies have to pay around ten times as much for replacement volumes of Russian gas.

The mood in the industry is tense. “Many companies are already converting their energy supply. Others simply have to stop production because the expense and income no longer match,” reported Russwurm. Other entrepreneurs are in despair because customers do not accept price increases and their business is collapsing as a result.

more on the subject – Gas levy: Stadtwerke Freiberg send an open letter to Habeck

(dpa/rt)

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