Germany is 'on the cusp of a recession' due to Russia's natural-gas squeeze and energy inflation
German business confidence has slumped and the country is on the brink of a recession, according to the Ifo Institute, a Munich-based think tank.
That's as the institute's Business Climate Index fell to 88.6 in July — its lowest level since June 2020. The measure of business sentiment stood at 92.2 in June. It's based on a survey of 9,000 managers across German businesses. Clemens Fuest, the president of the Ifo Institute, said the threat of a gas shortage and high energy prices are weighing on Europe's largest economy.
"Companies are expecting business to become much more difficult in the coming months. They were also less satisfied with their current situation,"Results of the survey, released on Monday, came just assaid it will be slashing natural-gas flows to Europe to 20% of Nord Stream 1's capacity from Wednesday. Russia restarted the pipeline on Thursday after a 10-day scheduled maintenance, keeping gas flows to 40% of capacity — which was already lower than before.
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