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Port of Hamburg: Uncertainty among companies and consumers
Photo: Daniel Reinhardt / dpa
The mood in the executive floors of the German economy clouded over again in June after two increases in a row.
The Ifo business climate index fell unexpectedly to 92.3 points from 93.0 points in the previous month, as the Munich Ifo Institute announced on Friday in its survey of around 9,000 managers.
Economists polled by Reuters had expected a slight decline to 92.9 points.
"Rising energy prices and the impending gas shortage are causing great concern for the German economy," said Ifo President Clemens Fuest.
Executives were more skeptical about their business situation and prospects than last time.
The Russian invasion of Ukraine is causing rising raw material prices, increasing delivery bottlenecks and heightened uncertainty among companies and consumers.
The Ifo Institute has therefore just lowered its forecast for growth in the German economy this year - from 3.1 to 2.5 percent.
In the coming year, growth is then expected to accelerate to 3.7 percent.
However, economists fear a severe recession in the winter if there are no Russian gas deliveries.
"The situation on the gas market is threatening," said Jens Südekum, government adviser and professor of international economics at the Heinrich Heine University in Düsseldorf.
“Then there is a risk of rationing of gas supplies and thus production stops in industry.
A severe recession could result.«
mike/Reuters
