Ukraine war expected to cost Germany $171 billion by year-end

The Ukraine war will have cost the German economy around 160 billion euros ($171 billion), or some 4 per cent of its gross domestic output, in lost value creation by the end of the year, the head of the German Chambers of Industry and Commerce (DIHK) said.

That means GDP per capita in Europe's largest economy will be 2,000 euros lower it would otherwise have been, DIHK chief Peter Adrian told the "Rheinische Post", according to Reuters.

Industry makes up a higher share of the economy in Germany than in many other countries, and the sector is for the most part energy-intensive, meaning German companies have been especially hard hit by a surge in energy prices, which last year hit record highs in Europe.

German industry is set to pay about 40% more for energy in 2023 than in 2021, before the crisis triggered by Russia's invasion of Ukraine on Feb. 24 last year, a study by Allianz Trade said last month.

"The growth outlook for 2023 and 2024 is therefore also lower than in many other countries," Adrian said, adding that was also the case last year.

Germany, which for decades relied on relatively cheap Russian pipeline gas, now has especially high energy prices compared with the United States that has its own natural gas reserves, while France has abundant nuclear power.

"The gas price is around three-five times higher than in the United States," he said, adding electricity was four times as expensive as in France.