Deutsche Bank: "High Possibility of German Economy Recession in Second Half of This Year"

[Photo by Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] Germany's largest bank, Deutsche Bank, has warned of an imminent economic recession in Germany, predicting a downturn in the second half of this year.

According to Bloomberg on the 14th (local time), Deutsche Bank stated in a report released that day that due to adverse factors such as reduced natural gas supply and a slowdown in the U.S. economy, Germany's economy is expected to contract in the second half of this year. Deutsche Bank also forecasted that Germany's gross domestic product (GDP) will decrease by about 1% next year.

Russian state-owned gas company Gazprom began scheduled maintenance on the Nord Stream 1 gas pipeline connecting Russia and Germany on the 11th, suspending gas supply. The maintenance is scheduled to last until the 21st, but concerns are rising that Gazprom may not resume gas supply even after the maintenance is completed.

Deutsche Bank explained, "It is reasonable to expect that Russia will continue to look for ways to disrupt Europe's economic activities as retaliation for Western sanctions and support for Ukraine," adding, "While it is uncertain whether Russia will completely cut off gas supply, it seems almost certain that Russia's gas supply restrictions will impact production and push Germany's economy into recession in the second half of this year."

The gas supply restrictions are expected to increase inflationary pressures in Germany. Deutsche Bank assessed that prices have not yet reached their peak.

This content was produced with the assistance of AI translation services.