German Economy May Look 'Quite Bad' in 2H: Ifo's Fuest

The video discusses the growing recession risks in Germany due to inflation and limited energy supplies from Russia. Companies face challenges with rising energy costs and supply bottlenecks, leading to adjustments like substituting gas with oil. The German government's fiscal response is limited due to the supply-side nature of the crisis. High energy prices and ECB rate hikes further strain the economy, particularly affecting manufacturing and construction sectors.

What is one of the main reasons for the potential recession in the German economy?

• High unemployment rates

• Record inflation and limited energy supplies

• Political instability

• Decreasing exports

How are some companies attempting to cope with high energy prices?

• By increasing production

• By substituting gas with oil or wood

• By expanding into new markets

• By reducing workforce

What is a limitation of substituting gas with other materials in the chemical industry?

• High cost of alternatives

• Incompatibility with production processes

• Environmental regulations

• Lack of skilled labor

What is a challenge for the German government in supporting the economy during this crisis?

• International trade restrictions

• The crisis is supply-side, making demand support counterproductive

• Political opposition

• Lack of financial resources

What is a significant factor affecting the construction industry in Germany?

• High financing costs and interest rates

• Shortage of raw materials

• Lack of skilled workers

• Environmental regulations