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Energy Crisis in Europe
Europe is bracing for tough winter as US-led push to “punish” Moscow for its military operation in Ukraine backfired on the EU, which has faced months of skyrocketing energy prices and rising inflation after Brussels joined Washington in attempting to “phase out” Russian oil, coal and gas.

IMF: German Economy May Face Significant Downside Risks Due to Gas Supply Shortages

© AP Photo / Michael SohnFILE - Pipes at the landfall facilities of the 'Nord Stream 2' gas pipline are pictured in Lubmin, northern Germany, Tuesday, Feb. 15, 2022
FILE - Pipes at the landfall facilities of the 'Nord Stream 2' gas pipline are pictured in Lubmin, northern Germany, Tuesday, Feb. 15, 2022 - Sputnik International, 1920, 20.07.2022
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WASHINGTON (Sputnik) – The German economy may face serious downside risks in the near future due to gas supply shortages, Assistant Director in the IMF's European Department Oya Celasun said on Wednesday.
"We have a baseline scenario, but we also see quite significant downside risks," Celasun told reporters.
The chance of a slowing economic growth is more likely than an improvement opportunity, she added.
In a severe scenario, which includes gas shortages and further price spikes, the IMF recommends measures of support for the most vulnerable population, she noted.
Celasun warned that negative effects of the overall situation in the world will not go away from the global economy until 2024. "That is also a big factor for Germany. We are expecting the growth to slow down for the world as a whole," she said.
Celasun also noted that the partial shutoff of Nord Stream 1 has led to a downturn in confidence.
"Even if in our baseline gas shortages would be avoided, they would be narrowly avoided, so the situation would remain quite precarious, and we think that is going to make households and firms cautious in the coming year," she said.
The Nord Stream gas pipeline in the German town of Lubmin. - Sputnik International, 1920, 20.07.2022
Energy Crisis in Europe
Europe Will Face 'Tense Situation' if Nord Stream Gas Supplies Not Restored, Austrian Minister Warns
The fund expects that Germany’s GDP growth will slow to 1.2% in 2022 and to 0.8% in 2023, the IMF Executive Board said on Tuesday.

"Growth is expected at 1.2 percent in 2022 and 0.8 percent in 2023, down from 2.9 percent in 2021," the IMF said after the conclusion of consultations on the Article IV agreement with Germany.

The IMF noted that Germany has faced new headwinds, including a curtailment of gas flows from Russia and higher energy prices due to the Ukraine crisis.
"Surging energy costs are reducing the current account surplus and feeding into to broad-based price pressures, with inflation expected to average 7.7 percent in 2022 and 4.8 percent in 2023," the board said.
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