Saudi Press

Saudi Arabia and the world
Friday, Apr 26, 2024

Germany’s economy is expected to contract under a Russian gas embargo

Germany’s economy is expected to contract under a Russian gas embargo

An embargo on Russian natural gas could cause Germany’s economic output to drop as much as 5 percent this year, the Bundesbank warned on Friday, potentially driving the country into a recession while pushing up already high consumer prices.
The central bank’s predictions, largely in line with those of several economic institutes, also served as a warning of the danger that Europe’s largest economy could face if Russia decides to cut off gas exports to Europe.

The central bank said its predictions were couched in uncertainty, given the unpredictable nature of the crisis surrounding Russia’s invasion of Ukraine. But its economic modeling showed that cutting off Russian natural gas, which before the war accounted for 55 percent of Germany’s supplies, would cause gross domestic product for the year to shrink 2 percent instead of growing by 3 percent.

“Natural gas prices are likely to rise the most, as Russian deliveries are difficult to replace in the short term,” the bank said. Roughly a third of all natural gas is used for industrial production, including steel and chemicals.

This week, the International Monetary Fund warned that the war in Ukraine would drag down the eurozone economy. It downgraded its forecast of economic growth to 2.8 percent from the 3.9 percent it had predicted in January.

Treasury Secretary Janet L. Yellen also warned that a ban on Russian gas could have a “counterintuitive” effect and harm Europe’s economy more than Russia’s by driving up the global price of fuel.

“Europe clearly needs to reduce its dependence on Russia with respect to energy,” Ms. Yellen told reporters in Washington on Thursday. “But we need to be careful when we think about a complete European ban.”

The European Union has banned Russian coal and is preparing a plan to embargo Russian oil. Although Germany has said it is working to end imports of Russian oil this year, it has been reluctant to move more quickly. Last year, Germany imported about a third of its crude oil from Russia.
Newsletter

Related Articles

Saudi Press
0:00
0:00
Close
Reports in Gaza: 5 dead from the impact of aid packages dropped by the USA
Apple warns against drying iPhones with rice
China Criticizes US for Vetoing UN Ceasefire Resolution in Gaza
In a recent High Court hearing, the U.S. argued that Julian Assange endangered lives by releasing classified information.
The U.S. vetoed a U.N. Security Council resolution calling for a temporary ceasefire in Gaza, instead proposing its own six-week ceasefire plan contingent upon the release of all hostages held by Hamas
Prince William Urges End to Gaza Conflict
Saudi Arabia ranks first in UN index for e-government services in MENA
Israel has gone ‘beyond self-defence’ in Gaza, says Labour’s Streeting
EU Calls for Immediate Ceasefire in Gaza Conflict
Israel Records 20% Drop In GDP, War In Gaza Is The Reason
Saudi Arabia's FDI Inflows Grow with New International Standards
Venture Capitals Power Up Across MENA Region
Saudi Arabia Introduces Terms for 30-Year Income Tax Exemption for Multinational Companies
Saudi FM: Establishing Palestinian state is only pathway for Mideast stability
Russian opposition leader Alexey Navalny has died at the Arctic prison colony
Elon Musk's Starlink Gets License For Israel, Parts Of Gaza
Influencers Exploit X Platform for Profit Amidst Israel-Gaza Conflict
PM Modi Announces Opening Of New CBSE Office In Dubai
International Criminal Court's Chief "Deeply Concerned" By Rafah Bombing
January Funding for MENA Startups Totals $86.5 Million
Saudi Arabia accelerates digital economy growth through Nvidia partnership
Indian female military officers commend Saudi Arabia's progress and women's empowerment
Israel unveils tunnels underneath Gaza City headquarters of UN agency for Palestinian refugees
Israel deploys new military AI in Gaza war
Egypt threatens to suspend key peace treaty if Israel pushes into Gaza border town, officials say
Israel Utilizes AI Military Technology in Gaza Conflict
Saudi Arabia Warns Of A "Humanitarian Catastrophe" If Israel Moves On Rafah
China Warns Iran to Halt Houthi Attacks or Damage Trade Ties
US University To Shut Qatar Campus Due To "Heightened Mideast Instability"
Iran-backed hackers interrupt UAE TV streaming services with deepfake news
Facebook and Instagram Ban Iran's Supreme Leader
Finnish Airline, Finnair, is voluntarily weighing passengers to better estimate flight cargo weight
U.S. Secretary of State Blinken: The Israelis underwent dehumanization on 7.10, this does not give them the right to do this to others.
Defense Technology Showcase Held in Riyadh
Saudi Arabia’s non-oil exports rise 2.5% to $6bn in November 2023: GASTAT
UK Bans Misleading "Zero Emissions" Claims for Electric Cars
Gaza's Teen Inventor Sparks Light in Displacement
Netanyahu Rejects Ceasefire Proposal, Insists On Total Victory Over Hamas
Guterres appoints independent UNRWA review panel
Private Sector Employment Hits Record High with Over 11 Million Employees in January
Rolls-Royce Executive Encourages Saudi Women to Tap into Their Inner 'Superhero' for Success in Defense Industry
Saudi Arabia launches National Academy of Vehicles and Cars
Saudi Tourism Minister Reveals Plan for 250,000 New Hotel Rooms by 2030
SAR to more than double eastern network passenger capacity with new trains deal
Saudi Arabia Enhances National Defense with New Partnerships
Saudi Aramco Maintains Arab Light Crude Pricing to Asia for March
NEOM Establishes New York Office to Support Investors
Saudi Wealth Fund Draws in Over $25 Billion Worth of Investments in Three Years, Al-Rumayyan Reveals
ZATCA Cautions Against Scammer Schemes
INTRA Defense Technologies inaugurates drone factory in Riyadh
×