A freeze on the supply of Russian gas would plunge Germany into recession, but this would have different regional effects.
This was the result of calculations by the Leibniz Institute for Economic Research Halle (IWH), as the researchers announced on Tuesday.
Accordingly, major economic damage is to be expected “where the manufacturing sector generates particularly high added value, for example in a number of districts and cities in southern Germany”.
Overall, economic growth would collapse by two percent in the coming year.
The calculations are based on the assumption that in the event of a gas supply stop, the storage tanks will be empty at the turn of the year 2022/2023 and that the gas quantities supplied to various branches of industry will be reduced proportionately in spring 2023.
In such a case, the economy would be hit differently in different regions, because different economic sectors in the regions would be affected to different extents by the crisis.
The manufacturing industry, mining and energy supply would be particularly badly affected.
For example, gross value added in North Rhine-Westphalia would decrease by EUR 40.8 billion in 2022 and 2023, by EUR 38.6 billion in Bavaria and by EUR 35.4 billion in Baden-Württemberg.
In Bremen, on the other hand, the decline would only be two billion euros, in Mecklenburg-Western Pomerania and Saarland 2.1 billion euros and in Saxony-Anhalt 3.5 billion euros.
Overall, western Germany would be much more severely affected due to its economic structure: the drop in gross value added here would amount to 173.1 billion euros, in eastern Germany only 27.1 billion euros.
The drop in the number of people in work would also be greater in the west, at minus 6.2 percent, than in the east, at minus 5.6 percent.