German industrial production is expected to fall further behind this year, after a dip in 2023. The usually strong manufacturing sector had already taken a hit because of higher energy prices.
Industrial output from Europe’s largest economy is expected to fall further this year, the leader of the Federal Association of German Industry (BDI) said on Monday at the Hanover Messe — one of the world’s largest trade fairs.
Roughly two decades of outstanding economic success have been rooted in cheap Russian energy that became unavailable since Russia’s full-scale invasion of Ukraine. The head of the BDI, a major lobby for German manufacturers, recently accused German Chancellor Olaf Scholz of underestimating the seriousness of the situation after an already depressed output for 2023.
This is a good example for investment in renewables or at the very least, nuclear power.
This is the best summary I could come up with:
Roughly two decades of outstanding economic success have been rooted in cheap Russian energy that became unavailable since Russia’s full-scale invasion of Ukraine.
Higher energy prices and interest rates have raised costs and dampened investment in a manufacturing sector already grappling with supply chain problems and the aftermath of the COVID-19 pandemic, BDI President Siegfried Russwurm noted.
“We expect industrial production to decline by 1.5% compared to the previous year,” said BDI President Russwurm.
“Despite moderate recovery prospects, we must not deceive ourselves: Overall, production figures have been showing a worrying downward trend for years,” said Russwurm.
Many of Germany’s energy-intensive companies have suffered particularly from the sharp rise in energy prices since Russia’s invasion of Ukraine.
High interest rates, which made investments more difficult, have also choked growth as businesses still struggle with delivery bottlenecks dating back to the coronavirus pandemic.
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