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Germany’s refusal of Russian oil and gas can lead to inflation rise by 2.3 p.p. — study

According to the calculations, if the German economy constantly adjusted to no longer receive oil and gas from Russia, the corresponding restructuring would take up to 10 years

BERLIN, March 29. /TASS/. Germany's refusal to supply energy from Russia could lead to a reduction in the country's GDP by 3% in the medium term and an increase in inflation by 2.3 percentage points. Such an assessment is contained in a study published on Tuesday by the German Institute for Economic Research (DIW) in Berlin.

According to the calculations, if the German economy constantly adjusted to no longer receive oil and gas from Russia, the corresponding restructuring would take up to 10 years. The volume of economic production of the country, as noted in DIW, with the rejection of Russian energy carriers will decrease by 3% within 18 months.

"The refusal to import [energy resources from the Russian Federation] will lead to an increase in inflation by 2.3 percentage points," according to the document published on the institute's website.

At the same time, the researchers noted that for Russia, the embargo on the supply of gas, oil and coal will also have far-reaching consequences.

"Even if Russia continues to be able to sell some of its energy carriers to third countries such as China, it can be assumed that this will only be possible with a significant reduction in prices," DIW concluded.

On Monday, German government spokesman Steffen Hebestreit said that the Cabinet currently was not supporting the introduction of a ban on Russian energy supplies, since their immediate termination would entail serious problems for the country. Earlier, according to him, German Chancellor Olaf Scholz presented the reasons for this decision. Hebeshtreit pointed out that "it primarily concerns the supply in Germany." In addition, according to a representative of the German Cabinet of Ministers, the authorities believe that such a boycott will have "significant economic consequences", including those connected with "a significant loss of jobs.".

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