Germany would go into recession with Russian energy embargo – minister
4511 Min Read
The German government’s reduced forecast for 2.2% growth this year does not assume a Russian energy embargo or blockade and the economy would tip into recession if either of those transpired, Economy Minister Robert Habeck said on Wednesday.
Habeck’s ministry on Wednesday cut its growth forecast for 2022 to 2.2% from 3.6% projected in January as Russia’s invasion of Ukraine, sanctions and high energy prices take a toll on output. It also raised its 2022 inflation forecast to 6.1%.
Germany’s support for Ukraine and sanctions against Russia resulted in the lower growth and higher inflation forecasts, Habeck said, telling a news conference: “We must be prepared to pay this price”.
“Ukraine is fighting for its freedom, its democracy, its form of government and its territorial independence. But they are also fighting for us – for Germany, for Europe, for the principles on which this peace order is, or was built,” he said.
An economy ministry official said an escalation of the gas situation with Russia would reduce growth in Europe’s largest economy by between 0.5 and 5.6 percentage points, depending on the scenario.
