The German economy will face a “sharp recession” if Russia will stop importing oil and gas products to the European Union, Germany’s economic institutes reported.
German economic institutes said through a joint economic forecast that the country will most likely lose 6.5 percent of the annual economic output or €220 billion of economic production from 2022 to 2023. The forecast also said that another setback may happen until 2024 if the war persists.
While Germany’s economy had gradually recovered from the impacts of the pandemic, the war in Ukraine has slowed down the country’s economic recovery, the joint forecast reported.
Germany has resisted ceasing imports of energy products from Russia despite the call of the European Union to boycott the country. The joint forecast said, however, that Germany has reduced its imports from Russia.
The economic institutes also said that gas rationing is to be expected, which will temporarily cause a significant fall in the country’s industrial production.
The energy supply has to realign itself if Germany becomes independent from Russian imports. “The decision to become independent of Russian supplies of raw materials is likely to remain valid even when the military and political situation calms down again,” the report said.
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