Germany predicted a recession due to the fall in Russian gas supplies

Deutsche Bank experts believe that European countries will face a serious new shock as a result of a reduction in natural gas supplies from Russia. Which, in turn, could further increase inflation in the European region and push Germany, the largest economy in the eurozone, into recession.

The bank's analysts suggest that a new major supply crisis has been unfolding in Europe in recent days. Last month, the reduction in gas supplies via the «Nord Stream» has already reached 60%.

According to Deutsche Bank forecasts, if the problem of declining supplies is not resolved in the coming days, this will increase problems in the energy sector and lead to serious consequences for economic growth and a significant acceleration of inflation.

Against the background of the current situation, German energy companies are beginning to discuss various business support measures with the German authorities. For example, the German energy holding Uniper SE is losing about 30 million euros a day due to the need to replace Russian gas supplies with more expensive alternatives.

And the chemical concern BASF SE, which uses natural gas not only for electricity generation, but also as a raw material for the production of chemical products, has already announced that it will be forced to reduce production.

Thus, a sustained gas shortage will significantly increase the risk of recession in Germany. This will also be a downward signal for the euro against the US dollar.