Germany would fall into a deep recession if Russia’s natural gas supply were suddenly shut down.
According to a report by five German economic institutes, the country would lose € 220 billion euros ($ 238 billion) in economic output over the next two years should such a shock occur.
Germany’s Gross Domestic Product (GDP) is projected to increase by only 1.9% in 2022 and contract by 2.2% in 2023. However, if gas supplies from Russia continue to flow, growth is expected to increase to 2.7% this year.
Stefan Kooths, director of research at the Kiel Institute for the World Economy and one of the report’s authors said. gas cuts from Russia would push Europe’s largest economy into a severe recession.
The revelations about the atrocities committed in Bucha, have prompted the European Union (EU) to increase economic sanctions against Moscow which targets energy exports for the first time since the conflict began.
As a first step, EU leaders agreed to block Russian coal imports in stages. Several officials of the bloc also called for restrictions on Russian oil and gas exports.
However, sanctions in the near future will bring disaster to Germany which is heavily dependent on Russian gas. According to the International Energy Agency (IEA) the country will have imported about 46% from Moscow by 2020.
In addition, it also has the potential to exacerbate inflation in Germany which hit a 40 -year high last month with a record 7.3%.
