International rating agency Fitch warns that closure of Nord Stream increases the likelihood of a recession in the Eurozone – Economy News

Fitch: Valves closed, Eurozone recession risk rises

International credit rating agency Fitch Ratings reported that the complete cessation of gas supply through the Nord Stream pipeline further increases the likelihood of a recession in the Eurozone.

In the statement made by the credit rating agency, it is predicted that the complete closure of the Nord Stream pipeline will cause a decrease of 1.5-2 points in the Euro Area Gross Domestic Product (GDP) in 2023 compared to the forecasts made by the agency in June.

Fitch, in its forecasts in June, announced that the Eurozone economy is expected to grow by 2.6 percent this year and 2.1 percent in 2023.

In the statement, it was noted that the complete cessation of gas supply through the Nord Stream pipeline further increased the likelihood of a recession in the Eurozone.

In the statement, it was stated that the effects of the Russian gas stoppage will differ between European Union (EU) countries, and it was stated that countries such as Germany, which are highly dependent on the Nord Stream pipeline and have low options to diversify their gas resources, have limited room for maneuver.

In the statement, it was pointed out that high natural gas prices increase the pressure on the margins and cash flows of European companies, and it was stated that fertilizer and metal companies in the region face the risks of reduced production and competitiveness compared to their international counterparts.

Russian energy company Gazprom announced on September 2 that it had suspended natural gas shipments through the Nord Stream pipeline indefinitely.

Russian officials claimed that the problems in natural gas shipments to Europe were caused by sanctions, while European officials claimed that Russia was using energy resources as a weapon.

* The image of the news was provided by Reuters.




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