The German economy would suffer a major blow in the event of an interruption in the supply of Russian gas, warned German institutes.
According to a joint economic forecast by five leading German economic research institutes, in the event of an immediate interruption in Russian gas supplies, a total of €220 billion ($238 billion) of German economic output would be at risk in 2022. and 2023.
This would equate to more than 6.5% of Germany’s annual economic output.
“If gas supplies are cut off, the German economy will suffer a severe recession,” said Stefan Kooths, vice president and research director for business cycles and growth at the Kiel Institute for the World Economy.
The institutes have reduced GDP growth in 2022 from 4.8% to 2.7% due to the ongoing war in Ukraine and its economic ramifications and expect inflation to reach 6.1% in 2022, the highest number in 40 years .
“In the event of a power outage, it would rise to 7.3%, a record in post-war Germany,” reads the press release.
In late March, Germany issued an “early warning” of possible natural gas shortages due to a payments dispute with Russia that could lead to energy rationing, urging all consumers to reduce their use as much as possible.
“The German economy recovery process is again delayed. The economic picture is shaped by opposing forces, all of which are raising prices, “said Kooths.
The Joint Economic Forecast was prepared by the German Institute for Economic Research (DIW Berlin), the ifo Institute (Munich), the Kiel Institute for the World Economy (IfW Kiel), the Institute Halle for Economic Research (IWH) and the RWI (Essen ).
Source: CNN Brasil
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