Bloomberg predicted Germany will lose its status as an “industrial superpower” – Kommersant
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Bloomberg agency published material about industrial production in Germany. The material states that the German economy, considered the largest in the eurozone, has been declining since 2017, and recently this decline has been accelerating due to a loss of competitiveness. Soon, Bloomberg writes, Germany may lose its status as an “industrial superpower.”
In the fourth quarter of 2023, according to preliminary data from the Destatis bureau, Germany’s GDP decreased by 0.3% compared to the third quarter. In general, in 2023, production in processing decreased by 1.5% compared to 2022, in energy production – by 10.2%, in the chemical industry – also by 10.2%.
Bloomberg writes that the decline in some industries is gradual and is reflected in a reduction in investment, while in others production lines are being changed and employees are being laid off. In extreme cases, production is curtailed: for example, the French manufacturer of seamless pipes Vallourec closed two factories in Germany.
The agency writes that the foundations of German industrial production “collapsed like dominoes.” The USA is beginning to compete with the EU, China is reducing imports from Germany. The heavy industry faced serious problems after the supply of cheap gas from Russia was cut off.
The German chemical industry suffered the most due to the loss of cheap Russian gas. Almost every tenth company in the industry plans to stop production processes due to unclear timing of the transition to hydrogen, according to a survey by industry association VCI.
The main catalyst for the decline, writes Bloomberg, is a crisis summer 2022. The German government managed to avoid the worst-case scenario, when gas consumption standards would have to be introduced. At the same time, electricity prices in Germany have increased more than in other European countries.
Read more about Russian gas supplies to Europe in the Kommersant publication “Europe is turning up the pipe“
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