Advisors to the German government says the economy faces up to 220 billion-euro or $240 billion output hit due to the interruption of energy supplies from Russia, Bloomberg reports.

  • The economic advisors say that a potential full halt to the imports of Russian natural gas could plunge the economy into a “sharp recession.”
  • The latest report comes amid increasing resistance to Russian gas supplies by Germany as it exerts pressure against Vladimir Putin’s invasion of Ukraine. Germany’s heavy reliance on Russian gas is seen as a potential headache for the economy.
  • The reports come amid a separate projection of a 2.7% and 3.1% German growth in 2022 and 2023, respectively, down from prior estimates of 4.8% and 1.9%. 
  • Germany is also expected to continue facing soaring prices this year due to the Ukrainian war, with prices projected to average 6.2% this year, the highest in 40 years.

The experts say Germany’s decision to become independent from the raw material supplies from Russia is likely to remain valid even if the geopolitical situation calms down. DAX is down -0.62%, EURUSD is down -0.04%