March 9 (Reuters) - German chemical association VCI on
Thursday said it saw further decline in the country's chemical
industry in 2023, weighed down by persistently high inflation,
weak global economy, energy crisis in Europe and Germany's
regulatory problems, among others.
Industrial production including pharmaceuticals was set to
decline 5% in 2023, while industry sales were expected to fall
7%, VCI said in its quarterly report.
However, it flagged some positive effects from easing energy
and commodity prices seen in recent months, which should
stabilize the situation in the first quarter of 2023, even
though the overall mood remained grim.
"Even if the mood brightens, the worries remain and unlike
the pandemic or the global economic crisis, there will be no
powerful recovery this time," said VCI's Managing Director
Wolfgang Grosse Entrup.
European chemical producers last week painted a bleak
picture of their prospects for 2023, citing the continuing
fallout from Russia's invasion of Ukraine, high inflation and
slowing economic growth.
"We got off lightly this winter. The real challenges for
Germany's industry still lie ahead. Nothing has been solved,"
Grosse Entrup said.
He added the energy crisis had revealed many local
regulation problems in Germany.
"Less regulation for more transformation," Grosse Entrup
said. "Our answer to the U.S. IRA should be an RRA - a
Regulation Reduction Act."
Companies across North America and Europe have in recent
months cheered the Biden Administration's $430 billion U.S.
Inflation Reduction Act (IRA) that includes major provisions to
cut carbon emission, boost domestic production and
manufacturing.
In the final quarter of 2022, German industrial production
including pharmaceuticals fell by 14% from a year earlier, while
the sector's revenues increased by 4.9% on the back of a 17.7%
rise in producer prices, VCI said.
(Reporting by Andrey Sychev and Bartosz Dabrowski in Gdansk;
Editing by Milla Nissi)
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