If the oil price stays where it is, Germany’s annual import bill for energy will be a lot lower than anticipated not long ago.
I do not know of any forecast that predicted $41 for a barrel of oil from the North Sea. That means, a key assumption behind the consensus outlook for GDP growth simply does not hold any longer.
As a net importer of oil and gas, recent developments have, on balance, been excellent news for Germany. I am certain that GDP forecasts for this year and next will be revised up.
In the twelve months before the oil price began to collapse in July 2014, the country spent €127 billion on energy from abroad. In the coming year, the bill will be only €60 billion if the oil price stays where it is right now, a saving of no less than 2.2 percent of a year’s GDP.
It is akin to a gift from foreign energy producers such as Russia, Norway or the OPEC – like a big tax cut that is not accompanied by rising government debt.