German experts warn that knock-on effects of Western sanctions contributing to more economic pressure on the Kremlin are imminent. They acknowledge that a collapse of gas trading with Russia will make a recession in Europe's largest economy inevitable.
A sudden halt to gas supplies from Russia will cost Germany 12.5% of its annual output, analysts predict. Total economic losses for the six months of 2022 could amount to €193 billion. “The dependence of the German economy on Russian gas is underestimated,” Prognos AG spokesman Michael Behmer said. According to a recent study conducted by Prognos researchers, a complete cutoff of Russian gas supplies may result in multi-billion dollar losses to a number of German industries. Thus, the glass, steel, and food industries will be the hardest hit sectors. Their total potential loss is estimated at €49 billion.
If Moscow stops natural gas supplies to the region, Germany will face supply chain disruptions and production delays in other industries. This in turn will lead to a €144 billion loss in the second half of 2022. In this case, the world's fourth-biggest economy could slip into a deep recession, Behmer summed up.
