Deutsche Bank: A recession is possible for the German economy.
The largest economy in Europe, Germany, has been warned about a potential economic recession by economists at Deutsche Bank.
They predict that Germany’s economy could contract by 1% over the course of the next year,
with sanctions also reducing the amount of Russian natural gas available to the country.
There are several reasons why Germany could experience an economic downturn in the second part of this year in America.
According to experts at the German Bank, Germany’s record inflation rate has not yet peaked,
and the ongoing Russian energy crisis has increased extreme caution across Europe,
especially in Germany because it is more dependent on Russian gas.
topıc
Political impasse in the European Central as a result of the looming recession.
After Musk withdrew from the “Twitter” purchase deal, he faces an uncertain future.
EU: Price shock to last longer with less growth expected
The energy crisis in Germany
Officials in Germany are concerned about the high costs of energy used in homes,
which may triple, after Russia blocked the Nord Stream 1 gas pipeline to Germany
and announced that it is currently performing maintenance on the line that stretches to July 21.
Germany is looking for a solution. Due to worries about potential decreases in Russian natural gas supply,
the energy crisis is being solved by activating 16 idle fossil fuel power plants and extending operational licenses to 11 additional plants.
Germany’s industrial production crisis
Due to the issue with supply chains and business closures caused by the Covid-19 pandemic in China,
German industrial production increased less than anticipated in May. Russian Ukrainian
Political impasse in the European Central as a result of the looming recession
In light of the decline in the energy crisis and the lack of a radical and immediate solution thus far
Europe is preparing for a state of recession with increasing expectations of an impending decline at a time
when the continent is fading from the state of recovery that it was in after the epidemic.
The European Central Bank is seeking to raise interest rates next Thursday,
which finds itself in an awkward position, unlike what is happening in the United States
, where government stimulus has fueled a demand-driven rise in consumer prices,
and the main reason for inflation is the rise in natural gas costs due to the Russian war on Ukraine.
Potential for recession
It is likely that US price pressures will be monitored for Europe due to the US Federal Reserve’s increase in interest rates
which could result in a state of economic deflation, but there is no assurance of this because the energy crisis is currently the most significant.
All of this places the European Central Bank in front of a number of challenges.
After the charges he was subjected to for failing to act swiftly to handle the crisis,
a strict option is to suspend or limit the rate rises.
Even if a mild recession occurs later this year, inflation pressure is expected to extend well into 2023,
said Ayla Mir, chief eurozone economist at Danske Bank.
There is a 45% chance of a recession next year,
according to a Bloomberg poll of analysts, up from 30% just last month.
After Musk withdrew from the “Twitter” purchase deal, he faces an uncertain future.
The “Twitter” platform has filed a lawsuit against billionaire Elon Musk for upholding the terms of the contract they signed to buy Twitter for $44 billion.
The Twitter platform is awaiting a ruling on the filed lawsuit as it waits for the first court sessions in the coming days.
The first session will take place on Tuesday in the eastern state of Delaware, United States.
An engineer working for “Twitter” told AFP that the best result for me would be if we were left alone to go our own way
as there is a tense atmosphere within Twitter among the employees who are also leaving
and added that they are trying to do their work normally because the reasons for working for Twitter are still there.
In statements by the Twitter platform’s lawyers, they stated in the invitation,
“Mask’s repeated disdain for Twitter and its employees creates a state of anxiety
harms Twitter and its shareholders.” He added that Musk’s comments also expose Twitter to negative repercussions on its business operations,
employees, and share prices.
Given the challenging circumstances that Twitter is going through, it is anticipated that the conflict will continue over the ensuing weeks and months.
This will eventually have a detrimental impact on Twitter and its investors. year 2028.
artıcal name Deutsche Bank: A recession is possible
EU: Price shock to last longer with less growth expected
The European Commission said that the European economy is facing a much slower outlook in addition to the high cost of living
and this situation came due to the repercussions of the Russo-Ukrainian war
with the European Union reducing its forecast by a full percentage point from its forecast for 2023 in the new forecast published on Thursday
where economic growth in the euro area is expected to be reduced.
The EU Economic Commissioner also added that Moscow’s disruption of energy and grain supplies has caused prices to rise and weaken confidence
as the European Central Bank prepares for its first rate hike in more than a decade next week.
She also mentioned that the rise in energy and food prices increases global inflationary pressures and leads to a faster monetary policy response
In light of the decline in the euro exchange rate and with expectations of reaching $1.06 in 2022 and $1.05 in 2023
which is much higher than the current level of the euro, which is close to parity with the dollar
If this low level continues, this may lead to higher import costs with a similar impact on inflation.
artıcal name Deutsche Bank: A recession is possible