The full economic consequences of Russia’s invasion of Ukraine will be felt only later this year, warned Christian Sewing, chief executive of Deutsche Bank AG, in an interview with Welt am Sonntag.
“Many of the side effects of this war will only become apparent in the second half of the year,” Sewing said when asked if there was a recession if the war continued for longer. “Consumption will fall, inflation will rise anyway and can stay above 5% for longer.” Supply will also be limited due to disrupted supply chains, he added.
Sewing said he expects the European Central Bank to raise interest rates in the second half of the year. “In the end, our economy is not likely to grow by 4% or 5% as originally assumed, but by 2% to 3%. In our baseline scenario, I do not expect a recession yet.”
Sewing also said:
“We have to let the current sanctions unfold. They are doing a huge disservice to the Russian economy. We see this in the Russian financial market, which has fallen.” And while they may have a negative effect on us, “we must continue to do so.”
“We must impose sanctions so that they harm Russia more than they harm us”
-Closure of the Nord Stream 1 gas pipeline will soon lead to major energy supply problems and significantly higher prices in Germany
-As long as energy imports from Russia are still possible, the German economy should hold well
-If the latest nuclear power plants are really as safe as some say, Germany should “at least look at them” instead of “shutting down nuclear power”.
Source: Capital
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