German wages fall sharply as they give up buying cheap Russian energy
(Baonghean.vn) - The Guardian newspaper commented that refusing cheap energy supplies from Russia will have serious consequences for the German economy. The country's real wages in 2022 will fall to their lowest level since 1950.
RT news agency reported that The Guardian newspaper commented that the shock of the energy crisis, after Russia began a special military campaign in Ukraine, caused the living standards in Germany to fall the most since World War II. At the same time, the economic output of the "locomotive of Europe" decreased on a par with the financial crisis of 2008.
Wages in Germany are set to fall by the most since 1950 in 2022, according to a report by two former economic advisers to the German government, a red flag that highlights the severity of the economic crisis in the once leading European power, The Guardian reported.
Researchers warn that German industry's failure to protect itself from rising energy prices could turn the 2020s into a "lost decade for Germany".
Germany's economic growth in 2024 and 2025 is projected to be lower than that of any comparable advanced economy except Argentina, according to the International Monetary Fund. Two consecutive quarters of declining output are defined as a technical recession.
According to experts, from April 2022 to March 2023, real wages in Germany fell by 4%, compared to pre-crisis forecasts. Production volumes also fell by more than 4%. Taking into account the damage caused by the Covid-19 pandemic crisis to industry, real output by the end of 2023 is about 7% lower than the pre-crisis trend; and real wages are 10% lower.
