London Daily

Focus on the big picture.
Sunday, Aug 23, 2026

Germany’s economy is expected to contract under a Russian gas embargo

Germany’s economy is expected to contract under a Russian gas embargo

An embargo on Russian natural gas could cause Germany’s economic output to drop as much as 5 percent this year, the Bundesbank warned on Friday, potentially driving the country into a recession while pushing up already high consumer prices.
The central bank’s predictions, largely in line with those of several economic institutes, also served as a warning of the danger that Europe’s largest economy could face if Russia decides to cut off gas exports to Europe.

The central bank said its predictions were couched in uncertainty, given the unpredictable nature of the crisis surrounding Russia’s invasion of Ukraine. But its economic modeling showed that cutting off Russian natural gas, which before the war accounted for 55 percent of Germany’s supplies, would cause gross domestic product for the year to shrink 2 percent instead of growing by 3 percent.

“Natural gas prices are likely to rise the most, as Russian deliveries are difficult to replace in the short term,” the bank said. Roughly a third of all natural gas is used for industrial production, including steel and chemicals.

This week, the International Monetary Fund warned that the war in Ukraine would drag down the eurozone economy. It downgraded its forecast of economic growth to 2.8 percent from the 3.9 percent it had predicted in January.

Treasury Secretary Janet L. Yellen also warned that a ban on Russian gas could have a “counterintuitive” effect and harm Europe’s economy more than Russia’s by driving up the global price of fuel.

“Europe clearly needs to reduce its dependence on Russia with respect to energy,” Ms. Yellen told reporters in Washington on Thursday. “But we need to be careful when we think about a complete European ban.”

The European Union has banned Russian coal and is preparing a plan to embargo Russian oil. Although Germany has said it is working to end imports of Russian oil this year, it has been reluctant to move more quickly. Last year, Germany imported about a third of its crude oil from Russia.
Comments

Oh ya 4 year ago
Yes Germany shoot yourself in the head and ban Russian gas. Maybe it will stop you from shipping anymore overpriced crap BMW cars. Russia will just sell your gas to China and India

Newsletter

Related Articles

0:00
0:00
Close
Iranian Hackers Shut Down British Power Plant for Four Days in Landmark Cyber Attack
Novak Djokovic Reveals Relentless Self-Doubt and Rejects Retirement in New Documentary
Trump Imposes 50% Tariffs on Canadian Goods After Bilateral Trade Talks Collapse
Australia Combines Indigenous Fire Knowledge With Satellite Tech to Combat Catastrophic Wildfires
Father and Son Jailed in Scotland Over £900,000 Airport Cannabis Smuggling Operation
UK Fraud Reports Surge Sevenfold as Criminals Exploit QR Codes in Parking Meters and Phishing Emails
Brighton Thrash Aston Villa in Four-Goal Opening Half as Manchester City Trail Bournemouth
Erin Patterson Appeals Triple Murder Convictions After Hotel Mixed Sequestered Jury With Prosecution
Bank of England Maintains Close Watch on Banks Amid Global Economic Uncertainty
Warm Weather and Tourism Support UK High Street Spending During Summer
Westminster Faces Continuing Political and Administrative Fallout From Epstein Files Release
UK Invests in Domestic Defence Drone Manufacturing to Strengthen Military Supply Chains
Around Five Million UK Households Face Higher Mortgage Payments by 2028
Bluetongue Virus Cases Rise Across England, Wales and Scotland
UK Government Holds First National Day for Victims and Survivors of Terrorism
Historic Summer Droughts Threaten UK Harvests and Put Further Pressure on Food Prices
UK Economy Holds Up in Second Quarter Despite Global Energy and Geopolitical Pressures
UK Opens National Artificial Intelligence Safety Testing Facility
UK Government Finalizes Plans to Bring Remaining Regional Rail Services Into Public Ownership
Environment Agency Imposes Record Penalties on Water Companies Over Illegal Sewage Discharges
Great British Energy Announces Offshore Wind Partnership in North Sea
UK Government Tightens Planning Rules to Accelerate Housing Development
NHS Launches Digital Overhaul to Cut Elective Care Waiting Lists
Bank of England Signals Interest Rates May Stay Higher for Longer as Inflation Pressures Persist
The rise and fall of Hui Ka Yan, China’s richest man
Woke: Britain Considers Plain Packaging for Cigars as Specialist Shops Warn of Industry Collapse
Britain's Public-Service Productivity Remains Below 2019 as £80 Billion Output Gap Fuels WFH Debate
Mandelson Epstein Case in Jeopardy as U.S. Files Stay Out of Reach
Prince Harry and Six Others Ordered to Pay £9.5 Million After High Court Defeat
Bank of England Holds Interest Rate at 3.75% as Inflation and Energy Risks Persist
UK AI Security Tests Find Autonomous Agent Attempting Malicious Code Injection
UK Economy Grows 0.4% in Second Quarter Amid Global Pressures
UK Joins European Allies in Condemning Israeli Settlement Plans in West Bank E1 Area
Multiple People Killed in A66 Collision Near Middlesbrough Involving Police Vehicle
UK Government Holds First National Day for Victims and Survivors of Terrorism
UK Met Office Warns of Severe Autumn Storms as Strong El Niño Follows Historic Drought
Petrol Bombs Set Luxury Cars Alight Outside Birmingham Wedding as Police Hunt Three Men
Bitcoin Surges Toward $80,000 as Short Squeeze and ETF Inflows Ignite Crypto Rally
Prince Harry and Co-Claimants Ordered to Pay £9.5 Million Toward Daily Mail Publisher’s Legal Costs
Prince Harry and Meghan Markle Reportedly Plan Return to Britain With Their Children
UK Court Ruling Threatens Deportation Plans for Potential Trafficking Victims to Albania
Kemi Badenoch Presses UK Government for Decisions on Rosebank and Jackdaw Oil Fields
UK Foreign Affairs Committee Chair Calls for Ban on Goods from Occupied West Bank
Andy Burnham Government to Place Civil Servants Directly in English Mayoral Offices
Met Office Warns Major El Niño Could Bring Stormier, Wetter Autumn to UK
UK Economy Gains Unexpected Momentum Ahead of Andy Burnham Government’s First Budget
Twenty-Nine US States Take Meta to Trial Over Alleged Child Addiction on Instagram and Facebook
Former Scottish National Party Executive Peter Murrell Jailed for Five Years Over £400,000 Embezzlement
Moderna and Merck's Personalized Cancer Vaccine Succeeds in Historic Late-Stage Melanoma Trial
Prince Harry and Meghan to Move Back to Britain With Their Children
×