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Germany calculates costs of Russian gas supply cut

The losses could amount to almost €200 billion this year, Bild reportsGermany calculates costs of Russian gas supply cut

Germany calculates costs of Russian gas supply cut

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The German economy could lose 12.5% of its annual output if Russian natural gas supplies are abruptly stopped, Bild tabloid reported on Tuesday, citing a study by the Bavarian Industry Association.

The analysis was reportedly carried out by Prognos AG, based on a scenario in which Russian gas supplies are cut off on July 1.

If this were to occur, Germany’s glass, steel, and food industries would suffer losses of €49 billion this year, which would affect production and supply chains in other industries. The costs were estimated to reach €144 billion in the second half of the year. In total, around €193 billion would be wiped out from GDP in the six months of 2022, the research shows.

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“The dependence of the German economy on Russian gas is underestimated,” Prognos AG spokesman Michael Behmer said, as quoted by the Bild.

Germany had once received around 55% of its imported gas from Russia. This month, Russian gas flows via the Nord Stream pipeline to the country were cut by as much as 60% due to technical issues arising from the sanctions on Moscow. In response to this, the German government launched the second ‘alarm’ phase of its three-level gas emergency plan. Berlin has warned that it faces a severe shortage of gas amid decreasing flows from Russia.

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