Monday, August 25, 2025

Latest

Ifo Dip Shows Germany Is On Track For A Recession; Energy Prices Edge Closer To €700 per MWh

Germany’s in for a bitter winter. For Europe’s largest economy, it seems that the question isn’t about whether or not it’s headed for a recession, but rather about how long and deep this recession will be. 

The ifo Index has fallen for a third consecutive month, hitting 88.5 in August, coming from 88.7 in July. This is the lowest the index has seen since the early months of the pandemic in June 2020. The index says that the German economy is expected to shrink in the third quarter.

The country’s GDP grew slightly by 0.1% in the second quarter, and private consumption was up 0.8%. But it’s difficult to see this figure holding up as inflation continues to skyrocket, and energy bills are expected to double or even triple in the coming months as Russia continues to tighten its grip on natural gas.

Read: With Power Bills Set To Surge 80% In October, Energy Crisis Could Hurt UK Households More Than 2008 Crash

A Cold and Expensive Winter

Much of the uncertainty in Germany’s economy comes from soaring energy costs. Bloomberg’s Javier Blas shared wholesale day-ahead electricity prices in Europe on Twitter on Monday. The map showed Germany going up to €658.41 per megawatt-hour. In 2020, the country was paying only €31 per MWh. 

The year-ahead contract for electricity, meanwhile, has risen to €995 per MWh, more than 10 times last year’s figures. This, plus Russia’s ongoing war in Ukraine and the global supply chain disruptions, make up the recipe for a likely winter recession.

New Energy-Saving Measures

On Wednesday, the government approved new energy-saving measures. Beginning in September, public buildings, except for hospitals, can only be heated up to 19C (66F), and heating may be completely shut off in entrances, corridors, and foyers.

Lights in public monuments and buildings will not be turned on for aesthetic reasons, and businesses may also be banned from keeping shop lights on overnight. The measures, which will be in place for six months, also include a ban on heating private swimming pools.

The government aims to slash gas usage by 2% with these new measures. The measures, according to the country’s economy minister, could save households, companies, and the public sector around €10.8 billion over two years. 


Information for this briefing was found via Bloomberg, Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

First Majestic Q2 Earnings: Another Record Quarter

Sandstorm Gold Fades Into Royal Gold Merger

Equinox Gold Q2 Earnings: Back On Track

Recommended

Emerita Resources Expands El Cura Drill Program By 10,000 Metres As Deposit Remains Open For Expansion

ESGold Signs MOU For Tailings Project In Colombia With Grades Up To 42 g/t Gold, 280 g/t Silver

Related News

Tesla’s European Factory Construction Halted Following Environmental Concerns

Over the past several days, Tesla’s value soared to an astronomical $611 billion market cap...

Wednesday, December 9, 2020, 04:37:00 PM

Germany Will Have No Choice But To Allow Russian Uranium Shipment

The German government’s hands are tied and it has no choice but to permit the...

Wednesday, September 14, 2022, 12:51:00 PM

Germany Still Hates Nuclear: Berlin Rules Out Extending Nuclear Power Despite Worsening Energy Crisis

Germany’s indecisiveness over its energy future continues, as the country’s environmental and economic minsters on...

Wednesday, March 9, 2022, 02:40:14 PM

German Music Rights Group Sues OpenAI Over Song Lyrics

Germany’s music rights organization GEMA sued OpenAI in Munich regional court for alleged copyright infringement,...

Saturday, November 16, 2024, 07:41:00 AM

Germany Raids Properties Linked to Climate Activists

German authorities have conducted nationwide raids on 15 properties associated with the Last Generation climate...

Thursday, May 25, 2023, 10:06:34 AM