Jakarta, CNBC Indonesia – The impact of the Russian and Ukrainian wars has been felt around the world. Germany, the country with the largest economic power in Europe, is one of the ones that has suffered the most.
Head of the German Chamber of Commerce and Industry (DIHK) Peter Adrian to Rheinische Postquoted Reuters Monday (20/2/2023), said the Ukraine war would cost the German economy around 160 billion euros or Rp. 2,592 trillion (exchange rate of Rp. 16,200) this year. This value is around 4% of the total gross domestic product.
That means GDP per capita in Europe’s largest economy will be 2,000 euros less than it should be.
Industry constitutes a higher share of the economy in Germany than in many other countries, and the sector is largely energy intensive. This means that German companies have been particularly hard hit by soaring energy prices, which last year reached record highs in Europe.
According to a study by Allianz Trade last month, German industry will pay around 40% more for energy in 2023 than in 2021, before the crisis sparked by Russia’s attack on Ukraine on February 24, 2022.
Therefore, the growth prospects for 2023 and 2024 are also lower than in many other countries, said Adrian, adding that the same thing happened last year.
Germany, which for decades relied on relatively cheap Russian piped gas, now has very high energy prices compared to the United States which has its own reserves of natural gas, while France has abundant nuclear power.
“Gas prices are about three-five times higher than in the United States,” he said, adding that electricity was four times more expensive than in France.
[Gambas:Video CNBC]
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