Delivery chain crashes struck in Germany, holding back business activity in Europe’s largest economy, reports Associated Press.
The Munich Institute of Economic Research IFO reported that the business climate index, which demonstrates business mood in the country and is calculated by the institute, fell to 97.7 points in October from 98.9 in September. “The moods in the economy of Germany were blunting. Delivery problems deliver to enterprises headache,” said IFO President Clemens Foust.
According to the head of the Macroeconomics Department of the Bank ing Carsten Bezezki, supply failures can last until the summer of 2022. However, Brzheski noted that to predict when they stop, difficult. “There is not only an increasing risk of a full stop of the German economy in the last quarter of 2021, but also the obvious risk that the economy will not reach the pre-crisis level in 2021,” said Bezhec. He added that there are positive moments: a large number of pre-orders in production, low unemployment and extra savings of citizens.
Against the background of growing consumer demand, supply failures limited the offer on everything – from oil to computer components. The lack of chips affected the most strongly on manufacturers, due to which representatives of the automotive industry released less cars than planned. In addition, purchasing power in Germany decreased due to inflation growth.
In September, the rise in prices in the Eurozone became a record since the world’s global financial crisis – inflation rose to 3.4 percent in annual terms. At the same time, the rise in prices in Germany reached the maximum for almost three decades. Inflation in the main economy of Europe in September increased to 4.1 percent. The main reason was the energy crisis. The cost of electricity in Europe has reached historical maxima against the background of reduced gas supplies from Russia and Norway.