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German companies falter in global market value rankings

Only four German companies are among the world’s top 100 most valuable firms – half as many as the previous year, according to a study published this week.

German companies falter in global market value rankings
VW did not make the list this year. Photo: DPA

The study conducted by professional services provider Ernst & Young at the end of 2009 found that the German companies ranked among those with the best market value all fell below 60th place.

Overall this means that the country fell from second to sixth place. The US came in first place with 38 top-ranked companies, followed by China with 11, the UK with eight, France with seven and Japan with five.

“The recovery of the equity markets in other countries, above all developing countries, was stronger, so that most of the companies in the ranking slid,” Ernst&Young spokesperson Hendrik Hollweg told daily paper Die Welt.

The first German company to make the list was Munich-based technology giant Siemens at 61st place. Despite the global recession the company managed to improve by two spots from its 2008 ranking – increasing its market capitalisation by $16 billion to $84.1 billion.

Energy corporation Eon took 62nd place with $83.8 billion in market value. Meanwhile pharmaceutical company Bayer made it to 81st place and telecommunications company Deutsche Telekom ranked 88th.

But software company SAP, insurer Allianz and energy provider RWE, and carmaker Volkswagen all dropped off the list, the paper said.

In 2008, the Wolfsburg-based Volkswagen was Germany’s most valuable company, but the recession cut the company’s worth in half – bringing it to 155th place. But Hollweg said that German companies should regain higher positions on the list soon.

“Right now a lot is pointing to a quick recovery of the world market,” he said. “In particular the export-driven German companies will profit.”

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ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

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With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

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