The Ifo business sentiment survey revealed on Monday that German company morale declined more than expected in July, with the institute that compiles it claiming that Europe’s largest economy was on the verge of recession due to rising energy prices and impending gas shortages.
The carefully monitored Ifo institute’s business climate index fell to 88.6, its lowest level in more than two years, and below the 90.2 prediction made by economists. The reading for June was slightly lowered downward to 92.2.
‘The economic downturn is at the door. That can’t be ruled out anymore ‘Klaus Wohlrabe, chief of Ifo polls, said.
Due to a large decline in supply from Russia, whose president, Vladimir Putin, the West accuses of weaponizing energy in reaction to sanctions put against him over the war in Ukraine, Germany faces the possibility of gas rationing unheard of in generations this winter.
In order to combat nationalists, Russia claims to be engaged in a ‘special military operation’ there.
This month, Russia shut down the Nord Stream 1 pipeline, which travels beneath the Baltic Sea and delivers gas to Germany, for ten days of maintenance.
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