Gas Crisis Risks Euro-Zone Recession, 2023 Inflation at 5%

European Union leaders are bracing for the shock of Russia turning off the gas taps and Brussels has given member states a 15% voluntary demand reduction target to prepare for such a blow. That should get Europe through next winter, even if Russian gas flows halt entirely and cost the euro-area economy about 0.4% of gross domestic product, according to Bloomberg Economics. If it’s unusually cold and more cuts are needed, that could tip the region into recession and leave 2023 inflation lodged at 5%.

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