The German Central Bank warns of the high cost of banning Russian gas

The German Central Bank warned Friday that if the European Union imposes an immediate embargo on Russian gas, the cost of this measure to Germany, which is heavily dependent on this energy resource, will be exorbitant, as it could reach 5% of GDP this year.

The Bundesbank said in a report that "Germany's real GDP could fall by up to 5% relative to current forecasts" if Russian gas imports were to stop immediately, whether for a voluntary or sudden reason.

He added that this means a surplus profit of "180 billion euros" for national production.

According to the report, in such a scenario, the German economy will shrink by 2% this year.

As for the inflation rate, which is mainly high in Germany, it could increase by “1.5 points in 2022” and “two points in 2023” compared to a scenario in which Russian gas imports continue to flow unchanged.

EU member states are deeply divided over the issue of a ban on Russian oil and gas imports since Russian forces began invading Ukraine on February 24.

The German government headed by Olaf Scholz is one of the most prominent opponents of an immediate ban on Russian gas because of the country's heavy dependence on this resource.

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