Islamabad, July 18, 2022 (PPI-OT): The Pakistan Economy Watch (PEW) on Monday said gas shortages will make Europe a cold hell and it will experience a winter of chaos and unrest soon. Reduction in the gas supply by Russia will hit masses, industrial and agricultural production, imports and exports and employment which will stoke inflation and shrink its GDP substantially, it said. The countries dependent on Europe for loans, aid, imports, exports, technology and remittances which include Pakistan will also face serious trouble, said Dr. Murtaza Mughal, President of PEW.
Experts think that inflation in the EU will jump by three percent while GDP will contract up to four percent, many businesses will go bankrupt, unemployment will rise and stagflation will damage the block. Dr. Murtaza Mughal said that presently gas price is up seven times in the EU while Germany is feeling more pain as it is more dependent on Russian gas.
He noted that oil exports make 10 percent of the Russian GDP and a ban would cripple its economy, but gas exports make only two percent of its GDP and suspending gas supply to the EU will not be a problem for Moscow. Presently, EU nations are in a race to buy LNG from the US and all other sources to ensure energy security, but it will not resolve their problem as they don’t have proper storage capacity while ensuring such capacity will take years.
Dr. Mughal said that efforts to secure as much LNG as possible have increased its price to unprecedented levels in the international market while the lack of Russian gas is resulting in an economic downturn and unrest in the EU. Some EU countries may alter their stance on the war between Russia and Ukraine to save their economy and avoid long hours of blackouts, which will be a test of the unity and resolve of the continent.
Dr. Murtaza Mughal noted that accepting Russian demands before the war was a better option which was ignored and now Russia will agree to peace with strict conditions as she is spending a billion dollars daily on the war and it has also tripled the salaries of the army.
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