Russia’s central bank fears that a ban on gas imports from Russia could lead to a recession. Last Friday, Germany’s central bank expressed concern. However, the central bank said that in the event of a recession, the economy of Germany, Europe’s largest economy, would shrink less than in the first year of the coronavirus. News of the British media Guardian.
The Guardian reports that the European Union is rapidly moving to impose sanctions on Russia’s gas. If that is the case, Germany’s central bank estimates that production could fall by 175 billion euros this year. As a result, Germany’s gross domestic product (GDP) growth could fall by 2 percent compared to 2021. The country’s central bank’s latest monthly report has made this forecast. The report also says that next year, Germany’s industries may suffer from gas shortages. As well as inflation will rise at a significant rate for a long time. Prior to the invasion of Ukraine, 55 percent of Germany’s gas demand was met by imports from Russia. These gases are used in heavy industries including steel and chemicals.
The report from Germany’s central bank also said that natural gas prices could rise sharply if Russia cut off gas supplies. Because, it is really difficult to make alternative arrangements for Russian gas. In the first year of the Corona, the country’s economy or GDP growth slowed to 4.6 percent. As a result, Germany’s 10-year economic growth plummeted. After overcoming that recession, the economy began to recover in 2021. Last year, the country’s economy turned around at a rate of 2.9 percent.
The Guardian reports that the European Union has already imposed a ban on coal imports from Russia. The EU is even planning to ban oil imports from Russia. However, due to German concerns, the EU is now reluctant to impose new sanctions on Russia. Because they think that a recession in their own territory could have a devastating effect on the European Union. The Guardian reports, quoting German Finance Minister Robert Hebak, as saying: Then the poor people of this country who heat their houses to survive the severity of winter, will not be able to do that. In addition, poverty and unemployment could rise sharply across the country. But critics say the German government is more politically afraid of pressure from the country’s industrialists.