Bundesbank expects drastic slump in energy embargo

Berlin, Frankfort The Bundesbank expects a sharp economic slump in Germany if there is an immediate energy embargo against Russia. This is the result of a study published on Friday. In the scenario, “the loss of gross domestic product in Germany in the current year could be in the order of up to five percent,” it says.

Instead of growing by around three percent, the German economy would shrink by almost two percent – almost 200 billion euros in added value would be lost. The German economy would continue to suffer from the effects in subsequent years. In addition, a sustained increase in the inflation rate in Germany and the euro area is to be expected.