BERLIN (Reuters) – The business climate in Germany deteriorated more than expected in June, due to rising energy prices and the risk of gas shortages in Europe’s largest economy, the survey showed on Friday. monthly from the Ifo Institute for Economic Studies.
Its business climate index fell to 92.3 from 93 in May as economists and analysts polled by Reuters on average forecast a drop to 92.9.
The component of the judgment of business leaders on their current business conditions fell to 99.3 after 99.6 (revised) last month and that measuring the evolution of their expectations also fell, to 85.8 in June after 86.9.
“Rising energy prices and the threat of a gas shortage are of great concern to the German economy,” said Ifo President Clemens Fuest.
A collapse of the economy, however, is not seen as an immediate risk.
“Despite heightened uncertainty, no recession is looming at the moment,” Klaus Wohlrabe, an economist at the institute, told Reuters.
While morale is improving among service providers, especially in the hospitality industry, still under the effect of the lifting of anti-COVID-19 restrictions, entrepreneurs as a whole are more pessimistic about their current situation and their prospects, particularly in distribution and industry.
“The chemical industry in particular is very worried,” said Clemens Fuest, referring to the gas supply on which this branch is particularly dependent.
Germany on Thursday activated level 2 of its emergency plan, which has three levels of alert, on gas supplies due to reduced deliveries from Russia and soaring prices.
Level 2 is provided when the government believes there is a high risk of a long-term gas shortage.
Last week, economics institute Ifo lowered its estimate for German gross domestic product (GDP) growth to 2.5% in 2022, down from a forecast in March of 3.1%.
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(Report Rene Wagner, written by Paul Carrel, French version Laetitia Volga, edited by Kate Entringer)