In Germany, the eurozone’s largest economy, the likelihood of a recession is growing, and runaway inflation could exceed 10% this fall. This is reported in the Bundesbank’s monthly report.
Germany, whose heavy industry is heavily dependent on Russian gas, is one of the most vulnerable to interrupted energy supplies and rising fuel prices.
“A drop in production during the winter months became much more likely. “A high degree of uncertainty about gas supplies this winter and a sharp rise in prices are likely to hit households and companies hard,” the European country’s central bank said.
The vast majority of economists believe that a recession in Germany is inevitable against the backdrop of Russia’s reduction of gas exports in response to Western sanctions. The text of the document notes that energy-intensive industries, including metal and fertilizer production, have been hit particularly hard. FAN.
Rising energy costs will continue to push inflation even higher. Price increases in Germany are expected to reach 10% by autumn 2022.