Rising energy prices push almost half German companies to cut new investments – survey

FILE PHOTO: The monetary district in Frankfurt, Germany, March 18, 2019. REUTERS/Ralph Orlowski

BERLIN (Reuters) – Round 40% of German corporations are already feeling the affect of rising vitality costs and nearly half wish to cut back investments because of rising vitality prices, a survey confirmed on Monday.

Gasoline and electrical energy payments for German house owners getting into into new contracts hit a file excessive final month and hovering pure gasoline and oil costs following Russia’s invasion of Ukraine helped push Germany’s annual inflation to a 40-year excessive in March.

Round 46% of corporations mentioned they wish to cut back investments because of rising vitality costs and 1 / 4 of German corporations anticipate to see a burden from value shock within the second half of the yr, a survey by the Ifo Institute revealed by Augsburger Allgemeine newspaper confirmed.

The survey, which questioned 1,100 corporations, most of them household companies, confirmed that each tenth agency was contemplating giving up energy-intensive companies fully, whereas 14% have been mulling job cuts because of rising vitality prices.

Virtually 90% of corporations mentioned they’d most likely have to boost costs to counter hovering prices, whereas three quarters plan to increase their investments in vitality effectivity, it added.

“We want a coverage that corrects this distortion of competitors and stops vitality costs from hovering,” mentioned Rainer Kirchdoerfer, board member of The Basis for Household Corporations which commissioned the survey.

Germany’s ruling coalition unveiled aid measures final month value roughly 16 billion euro ($17.3 billion) to assist shoppers address hovering vitality prices and to cut back dependence on Russian gasoline after the invasion of Ukraine.

($1 = 0.9264 euros)

Reporting by Riham Alkousaa; Enhancing by Daniel Wallis

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