Germany: Industry to structurally suffer on gas supply stoppages – Deutsche Bank

FXStreet Insights Team FXStreet

Germany has declared the first stage in the emergency plan for gas supply. The greatest impact in the event of gas supply stoppages would be expected in industry. Economists at Deutsche Bank distinguish between first, second and third-round effects.

Early warning stage for gas supply: Industry on alert

“In the first round, there would be targeted and announced shutdowns of specified individual large consumers, potentially for a long period.”

“In the second round, the consumers of products from energy-intensive manufacturing would also be affected, i.e. the classic capital goods manufacturers (automotive, mechanical engineering, electrical engineering).”

“Third-round effects would include job and income losses in the affected sectors. In addition, even higher energy prices and corresponding negative effects on disposable incomes would be expected. The savings ratio could rise for precautionary reasons and dampen private consumption.”

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