Germany faces recession as energy crisis bites: think-tank

FRANKFURT, Germany - Germany will fall into recession next year, a leading think-tank warned Monday, with Europe's biggest economy facing soaring inflation as Russia slashes energy supplies.

The Ifo institute expects the German economy to shrink 0.3 percent in 2023 -- slashing its forecast by four percentage points from a previous prediction in June.

Inflation is expected to hit 8.1 percent this year and 9.3 percent next year, it said. 

"We are heading into a winter recession," said Timo Wollmershaeuser, Ifo's head of forecasts.

"The cuts in gas supplies from Russia over the summer and the drastic price increases they triggered are wreaking havoc on the economic recovery following the coronavirus."

Real household incomes and purchasing power will drop sharply, the think-tank warned.

There is likely to be a "return to normal" in 2024 with 1.8 percent growth and 2.5 percent inflation, Wollmershaeuser said. 

At the start of September, Russian energy giant Gazprom halted gas deliveries to Europe via the key Nord Stream 1 pipeline saying it would be under repair for an unspecified period. 

The shutdown accentuates an energy crisis in Germany, long reliant on Russian gas, and across Europe, with Moscow accused of using energy as a weapon amid tensions over the Ukraine war.

German inflation hit 7.9 percent in August, and earlier this month the government unveiled a new multi-billion-euro relief package to help households cope with soaring prices.

Last week, the European Central Bank hiked interest rates by a record 75 basis points as its seeks to battle sky-high inflation across the eurozone and said more increases were to come. 

Agence France-Presse

Gas supply shock would cut value of Europe's economy, ECB says

FRANKFURT - A negative shock from any gas supply disruption would eat into the value of goods and services produced in the euro zone, the European Central Bank said on Tuesday, worsening the impact of high energy prices on the bloc's growth.

Record energy prices in response to concern a Russian attack on Ukraine will lead to disruption of fuel exports to Europe have dented euro zone growth. Russia denies any plan to invade.

In an Economic Bulletin article on Tuesday, the ECB said it expected high energy prices would reduce euro zone economic output by around 0.2 percent this year, compared with baseline levels of GDP, with the biggest impact in the first quarter.

Over 90 percent of the gas used in the euro zone is imported, the ECB said, meaning negative economic impacts would be aggravated if the bloc loses some of its gas supply.

"The direct and indirect impact of a hypothetical 10 percent gas rationing shock on the corporate sector is estimated to reduce euro area gross value added by about 0.7 percent," the bank said.

The actual fall could even be greater as the modeling does not consider the effect of energy price changes, the ECB said.

Austria and Slovakia would take the biggest hit, the ECB said, while among industrial sectors, basic metals would likely suffer the most.

(Reporting by Balazs Koranyi; editing by Barbara Lewis)

-reuters-

Petron, Flying V slash fuel pump prices

MANILA -- Petron Corp. and Flying V said they will be reducing prices of regular and premium gas, diesel, and kerosene products effective 12:01 a.m. on April 13, Saturday.

Petron said prices of Blaze 100, XCS, Xtra Advance and Super Xtra will be cut by P1.65 per liter; kerosene rates will be slashed by P0.75 per liter; and Turbo Diesel and DieselMax prices will be decreased by P0.55 per liter.

Flying V, meanwhile, said prices of Rush, Thunder, Volt, and Leadfree will be lessened by P1.50 per liter; regular gas rates will be cut by P1.25 per liter; and biodiesel prices will be slashed by P0.05 per liter.

The rollback reflects the movement in prices in the international oil market, the firms said.

source: www.abs-cbnnews.com

Shell raises pump prices

MANILA, Philippines - Shell raised pump prices in areas covered by a price freeze last week.

Premium gasoline is up by P1.80 per liter, regular gasoline by P1.70, diesel by P1.50 and kerosene by P1.60.

The price hike is effective in the National Capital Region, Bulacan, Pampanga, Bataan, Zambales and Rizal.

It is also effective in Sta. Cruz and Pagsanjan, Laguna, Bacoor, Kawit and Rosario Cavite. - ANC

source: abs-cbnnews.com

Gas, diesel prices seen dipping this week

MANILA, Philippines - Hefty rollbacks in the prices of gasoline and diesel---as much as P1.75-P2.00 a liter for gas---may be expected this week, the Department of Energy said Monday.

Slowing demand in other countries accounts for the expected decline in local market prices, said Director Zenaida Monsada of the DOE.Per estimates of sources in the oil industry, the market could expect gasoline prices to decline by P1.75-P2.00/L and for diesel, by P0.75-1.00/L.

It will be the 12th such rollback this year.

The Department of Energy explained that demand was substantially reduced in the United States and Europe, both going through a rough economic patch.

Despite the impending cutback in local oil prices, the DOE advised the public to continue practicing energy conservation measures, saying world prices remain volatile.

"These levels we are seeing these days are way below the ideal levels of producing countries, so we don't know if at this point they will start applying a correction," said Monsada.

source: interaksyon.com