KONTAN.CO.ID - BERLIN. Germany would face a sharp recession if gas supplies from Russia are suddenly cut off, the country's leading economic institutes said on Wednesday, and the government said the war in Ukraine poses "substantial risks" for Europe's largest economy. A sudden stop in Russian energy supplies - an adverse scenario and not the institutes' baseline expectation - would slow economic growth to 1.9% this year and result in a contraction of 2.2% in 2023, they said. The chairmen of three German parliamentarian committees called on Tuesday for the European Union to impose an embargo on Russian oil as soon as possible. But a survey published on Wednesday showed most Germans baulk at that idea.
Read Also: More Taiwan Firms Suspend Production in China as Covid Spreads "If gas supplies were to be cut off, the German economy would undergo a sharp recession," said Stefan Kooths, vice president and research director business cycles and growth at the Kiel Institute for the World Economy. The cumulative loss of gross domestic product (GDP) in 2022 and 2023 in the event of a such supply freeze would likely be around 220 billion euros ($238 billion), or more than 6.5% of annual economic output, the five institutes said. In its monthly report, Germany's Economy Ministry said the war in Ukraine "poses substantial risks" for the economy, but it was hard to quantify effects: "They depend heavily on the duration and intensity of the war," it said.