Recession warning from the German Banks Association


President of the German Banks Association (DBD), Christian Sewing, warned that the German economy would face a serious recession if imports of Russian oil and gas were frozen.

In his speech at an online banking conference organized by the BDB, Sewing evaluated the impact of the war in Ukraine on the economy and the steps to be taken by the ECB in terms of assets and interest.

Deutsche Bank Chief Executive Officer (CEO), Christian Sewing, stated that the German economy will be significantly affected by the Ukraine war, and emphasized that the risks arising from the Ukraine war are manageable for German banks.

Stating that the DBD has halved the German economy’s 2022 growth forecast compared to its forecast before the war in Ukraine began, Sewing said that he expects a sharply slower growth of 2 percent in Germany this year due to the war in Ukraine. .

“Inflation rises well above 7.5 percent”

Sewing said the German economy would risk a serious recession if imports or deliveries of Russian oil and gas were frozen. “The situation would be even worse if the import or supply of Russian oil and gas was stopped. Then it would be difficult to avoid a major recession in Germany.”

Sewing emphasized that in the event of an energy embargo against Russia, even higher rates of inflation, 7.5 percent, could be seen.

Referring to the new quarantine measures in the Kovid-19 epidemic in China “Global supply and retail chains are being put to the test once again.”

Referring to the monetary policy of the European Central Bank (ECB) in the period of high inflation, Sewing repeated the call from the ECB to intervene in inflation in a timely manner.

Sewing, “With the end of negative interest rate policy, the ECB may limit further increases in inflation expectations. Such a signal is urgently needed.”

Meanwhile, Germany buys 55 percent of its natural gas, 35 percent of crude oil and 45 percent of coal from Russia


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