Germany's business climate index falls amid threat of gas shortages

By Ovunc Kutlu

ANKARA (AA) - Germany's business climate index declined in June amid the threat of natural gas shortages, according to a Munich-based research institute on Friday.

The index, which measures expectations of manufacturers, builders, wholesalers, and retailers for the next six months, fell to 92.3 points in June, according to the ifo Institute for Economic Research.

While the market expectation for the index was to come in at 92.9 in June, it stood at 93.0 points in May.

"Companies were somewhat less satisfied with their current business situation. Their expectations turned markedly more pessimistic. The threat of gas shortages is of great concern to the German economy," ifo said in a statement.

Clemens Fuest, the president of the Institute, said German companies are more pessimistic about the second half of this year, adding that "the chemical industry is thoroughly alarmed."

He added that the business climate index in trade took a nosedive, as businesses' expectations fell to the lowest level since April 2020.

Germany, Europe's largest economy, faces a natural gas shortage and called Russia's gas supply cuts as an "economic attack" on Tuesday, before initiating the "alarm" phase of its emergency natural gas plan on Thursday.