20 C
Thursday, June 8, 2023

Germany on the Verge of Recession amid Energy Crisis

Meanwhile, the German chemical company BASF has announced it will eliminate 2,600 jobs

Must read

GERMANY: As the biggest economy in Europe braces itself for a recession brought on by the energy crisis that worsened following Russia’s full-scale invasion of Ukraine a year ago, the German chemical company BASF has announced it will eliminate 2,600 jobs.

In a statement released on Friday, BASF said that the year was “dominated by the effects of the war in Ukraine, especially the rise in the prices of raw materials and energy.” In 2022, it spent an additional €3.2 billion (£2.8 billion) on energy expenses worldwide.

- Advertisement -

With 157 years of history at its Ludwigshafen location on the Rhine near Frankfurt, BASF is the biggest chemical group in the world and one of the pillars of German industry. It creates chemicals that are used to create a wide variety of goods around the globe, such as fertilizers, plastics, automobiles, and pharmaceuticals.

It has already taken a €7.3 billion loss on plants in Russia that were taken over by the government, but its dependence on gas pipes from Russia has hurt it the most. It announced that it would shift some production away from Germany and close one of the two ammonia facilities as well as two plants for plastic chemicals.

- Advertisement -

After decades of relying primarily on Russian gas, the February 24, 2022, invasion of Ukraine forced European industry to scurry to find alternate energy sources. As a result, energy costs increased sharply.

The crisis has caused a decline in German industry. Germany’s Federal Statistics Office released data on Friday showing that the country’s GDP decreased by 0.4% in the final three months of 2022.

- Advertisement -

In 2022, BASF lost a total of €627 million because fewer people bought its goods and the cost of materials went up. Overall sales rose by 11% to €87.3 billion as a result of higher prices reflecting the increased costs they were bearing. 

Also Read: Germany Nationalises Gas Giant Uniper to Battle Energy Crisis


- Advertisement -


- Advertisement -

Trending Today