Leading economic institutes in Germany calculate that when the EU completely embargoes Russian energy, it will push this country into recession...
Today, five of Germany's leading economic research institutes issued a warning that if all energy supplies from Russia were cut off immediately as proposed by the European Union (EU)., German economic growth will slow from 2.9% in 2021 to 1.9% this year and to 2.2% in 2023.

“If gas supplies are cut off, the German economy will experience a sharp recession,” said Stefan Kooths, vice president of the Kiel Institute for the World.

Specifically, Mr. Kooths pointed out that the German economy could lose more than $238 billion in 2022 and 2023, or 6.5% of GDP.

Marcel Fratzscher, head of the German Institute for Economic Research, said the Russian energy embargo could have a "long-term impact" and "cause more damage to the economy than the COVID-19 pandemic.": :“This will permanently erode the competitiveness of German industry, especially in sectors such as chemicals, steel production and fertilizers ”.

Economic institutes also warn that ending Russian energy imports will increase the number of unemployed people in Germany from 2.37 million to 2.79 million next year. The inflation rate this year may also hit a record 7.3%.

However, a survey by the Allensbach Economic Institute showed that up to 30% of Germans support a ban on all Russian energy imports.

Germany is one of the major energy importers. Last year, it imported half of its gas and coal needs and a third of its oil needs from Russia. Berlin plans to diversify its oil supply to reduce dependence on Russia by the end of this year and give up this gas source in the next two years.

According to the analysis of the research institutes, even if Germany continues to import Russian oil and gas, the country's economy will still be affected by many factors including the Russia-Ukraine conflict, congestion supply chain due to the COVID-19 pandemic and high inflation. As a result, Germany's growth forecast for this year has been lowered from 4.8% in October 2021 to 2.7%.

The above forecasts are made by the German Institute for Economic Research, the Ifo Institute for Economic Research, the Kiel Institute for World Economy, the Halle Institute for Economic Research and RWI.

Last week, the EU agreed to ban Russian coal imports from August. Some member states called for the union to ban both oil and gas imports, but Berlin opposed the move, fearing the damage. economically too large for German businesses and consumers.
Axact

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