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ENERGY

Siemens unveils ‘green’ investment in India

German industrial group Siemens said Tuesday it would spend 16 billion rupees ($346 million) in India, mainly in renewable energy, as part of a drive to step up investment in the country.

Siemens unveils 'green' investment in India
Siemens CEO Peter Löscher in New Delhi. Photo: DPA

As part of its plan, Siemens has allocated five billion rupees to build wind turbines for the energy-hungry market, the first of which should be ready by 2012.

“Our goal is to strengthen our position as the leading provider of green infrastructure solutions in India’s booming market,” Siemens chief executive Peter Löscher told reporters in New Delhi.

The money will be phased in over the next three years.

Siemens, which has a presence in many different areas in India from energy and healthcare to information technology, also said it planned to boost its workforce in the country to 25,000 by 2012 from 17,000 currently.

The jobs announcement came days after Siemens, which has been operating in the subcontinent for 140 years, announced it would eliminate 1,990 German jobs in its machine tool and industrial services divisions.

However, Löscher said the decision to add jobs in India and cut them in Germany was unrelated.

“The growth of India and other emerging countries is remarkable. These countries will prosper in 2010 and beyond,” he said. “That’s why we’re expanding our presence here.”

Loescher was part of a business team accompanying German President Horst Kohler who arrived Monday for a six-day visit to meet Indian political leaders and explore ways to boost trade and investment between the countries.

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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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