Depending on Russian energy, Germany may "drop" the position of the world's 4th largest economy to India.

A new report from the Centre for Economic and Business Research (CEBR) suggests that Germany could lose its position as the world's fourth-largest economy in nominal US dollars to India by 2027.

Germany has faced increasing supply-side headwinds in recent years. (Image source: Euractiv)

According to the CEBR study, Germany's drop to fifth place is due to its dependence on Russian energy to fuel production.

CEBR wrote: “Germany has faced increasing supply headwinds in recent years, particularly from the rise in global energy prices in 2022. Germany’s dependence on Russian energy supplies has exacerbated this problem.”

According to the report, facing the shock of rising energy prices has contributed to inflation in the European Union's largest economy. Prices rose 6.3% in 2023, down from the 8.7% increase recorded in 2022, but still higher than the recent average.

The report states: "Rising inflation has contributed to weakening spending power and limiting consumer activity. This has significantly impacted consumer-oriented services. Germany's gross domestic product (GDP) is projected to contract by 0.4% in 2023 – the country's weakest growth rate since 2009."

Furthermore, CEBR states that global GDP will more than double from its current level, reaching $219 trillion by 2038, due to "continued expansion in previously less developed economies as they catch up with and surpass wealthy nations."

Source: https://baoquocte.vn/phu-thuoc-vao-nang-luong-nga-duc-co-the-danh-roi-vi-tri-nen-kinh-te-lon-thu-4-the-gioi-vao-tay-an-do-256291.html