Allianz Trade: Germany will pay 40% more energy prices than before the Russian invasion of Ukraine
Allianz Trade company issued a study on Monday, indicated that the German industry will pay about 40% more on energy prices in 2023 than in 2021, attributing the reason to the Russian invasion of Ukraine.
Allianz Trade, the credit insurer that changed its name from Euler Hermes last year, said the big shock to energy prices still awaited European companies.
In 2022, higher corporate utility bills were contained due to significant delays in moving into wholesale markets and government interventions that mitigated the immediate hit from higher prices.
The company estimated that the price increases would hurt corporate profits across Europe by 1-1.5% and lead to lower investment, which in Germany’s case would amount to €25 billion (US$27 billion).
The financial resources of German companies are strong, noting that the imposition of a limit on gas prices by the state will certainly help.
The study said that fears that the crisis may lead to a decline in industrialization and that the loss of competitiveness against the United States is exaggerated, because labor costs and exchange rates have a greater impact on manufacturing than energy prices.
The study added that while exporters were losing market share in areas such as Agri-food, electrical machinery and equipment, metals and transportation, the relative beneficiaries were from Asia, the Middle East and Africa rather than Americans.
The German Ministry of Economy said that the German government’s one-time payment to help private households and small businesses with gas prices – the first stage of the package that will be completed with retroactive price limits starting next March – had cost 4.3 billion Euros until January.
