Germany’s ‘sharp recession’ due to Russian gas cuts

FRANKFURT: The sudden cessation of Russian energy supplies will plunge Germany into a “sharp recession” next year, prominent economic forecasters predicted Wednesday.

Germany, which relies heavily on Russian gas, has so far rejected demands for a European embargo.

A 1.9 percent growth in 2022 and a 2.2 percent contraction in 2023 are predicted if the taps are shut in “mid-April” this year.

The impact of a boycott would “not be overcome” in two years, the institutes said.

With the onset of the European winter, the world’s largest economy may suffer a “setback” in 2023-2024, before “gradually” recovering.

The institutes claim that even without a Russian gas boycott, the Ukraine war is slowing Germany’s economic recovery from the coronavirus pandemic.

The group reduced its growth forecast for 2022 from 4.8 percent in October to 2.7 percent.

It also raised its growth forecast for 2023 from 1.9 percent to 3.1 percent if energy supplies continue.

Before the Ukraine war, Russia supplied a third of Germany’s oil, 45% of its coal, and 55% of its gas.

It has begun weaning itself off Russian energy imports, accelerating renewable energy investments, and building LNG terminals to diversify its supplies.

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