IMF expects a 6% decline in European economies
The International Monetary Fund (IMF) expects a 6% drop in European economies if Russian gas is cut off, Alfred Kamer, director of the IMF’s European division, wrote in a blog post on the fund’s website.
Kamer writes that Central European countries – the Czech Republic, Hungary and Slovakia – risk losing up to 40% of their gas volumes, which will lead to a 6% decline in their economies. The most important economies within the European Union – Germany, Italy and Austria – will also face significant challenges.
However, Kamer notes that in these countries, the collapse of the economy will depend on the actions of the authorities.
Kamer cites the opinion of IMF experts: “It may be difficult to completely replace Russian gas imports in the short term.”
He added that liquefied natural gas will be able to replace two-thirds of Russian gas supplies over the next 12 months, but the EU will not be able to completely bypass the energy crisis: some countries do not have the infrastructure to receive LNG carriers.
Moreover, the restrictions on the energy transmission system impede the ability to transport gas from alternative sources through some regional distribution systems and even within some countries, as a result of which some Central and Eastern European countries, including Germany and Italy, are dependent on Russian gas particularly at risk.”
