Europe is facing a Recession
Europe faces a growing risk of recession due to rising oil and gas prices amid fears that Russia could cut off supplies altogether, economists have warned, cited by the Guardian.
According to Nomura, a Japanese investment bank with a significant presence in London, Europe's economy will be hit by a variety of factors, including falling demand in the US - its biggest export market - the ongoing fallout from Russia's invasion of Ukraine and the associated rise in oil prices. food and energy.
Nomura expects the European economy to start contracting in the second half of 2022 and the recession to last until the summer of 2023, with the overall decline reaching 1.7% of GDP.
Energy prices already rose in the second half of 2021 as leading economies eased restrictions imposed by the coronavirus pandemic, but Russia's incursion into Ukraine added further difficulties as the EU, US and UK sought to isolate Russia economically. Europe is still heavily dependent on Russia for its energy supplies, and Russian President Vladimir Putin has responded to the sanctions by slowing gas supplies. Russia has suspended gas supplies via the Nord Stream 1 gas pipeline to Germany, via the TurkStream gas pipeline to Bulgaria and stopped supplies to Poland via the Yamal gas pipeline, the publication reminds.
Europe is grappling with "conditions that are largely global in nature (rising energy prices and inflation, rising geopolitical risks and uncertainty) which lead us to believe that European economies will suffer the same fate - a recession -- like the US," wrote George Buckley, an economist at Nomura. Inflation in the Eurozone hit 8.6% year-on-year in June, the highest level since the bloc was created in 1999.
Analysts at US investment bank JP...