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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