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RIYADH: Halting Russian gas supplies to Germany would trigger a deep recession and cost half a million jobs, a senior economist said in an interview published on Tuesday, as Europe’s biggest economy tries to cut Russian energy imports.

Achim Truger, a member of the German Council of Economic Experts, said German industry could suffer serious long-term damage if Russian President Vladimir Putin decides to cut gas exports to Germany.

“By most calculations, the end of gas supplies from Russia would trigger a deep recession. Half a million jobs could be lost,” Truger told the Rheinische Post daily.

Last month, Russia’s gazprom cut off gas from Poland and Bulgaria for refusing to pay in rubles and threatened to do the same to others, raising fears it could take similar action against Germany .

Russian gas accounted for 55% of Germany’s imports last year, and Berlin has come under pressure to cut a trade relationship that critics say helps fund Russia’s war in Ukraine.

Truger also said it would take a long time for inflation in Germany to come down again.

“Excessive inflation will continue through 2023,” he said.

German inflation hit its highest level in more than four decades in April, pushed higher by a surge in prices for natural gas and petroleum products since Russia invaded Ukraine.

Japanese household spending

Japanese household spending fell 2.3% in March from a year earlier, government data showed on Tuesday, marking the first drop in three months.

It compares with economists’ median estimate of a 2.8% decline.

Romania raises interest rates

Romania’s central bank raised its benchmark interest rate 75 basis points higher than expected to 3.75% on Tuesday and warned inflation would remain in double digits until the second half of 2023.

The bank raised its lending facility rate to 4.75% from 4.00% and its deposit rate to 2.75% from 2.00%, and said it would retain firm control over the liquidity of the market.

A majority of analysts polled by Reuters had expected a 50 basis point hike, while some saw a larger increase of one percentage point.

Rise in retail volumes in Australia

Australian retail sales volumes beat forecasts in the March quarter even as prices for many goods rose sharply, indicating resilient consumer demand and a strong start to the economy this year.

Data from the Australian Bureau of Statistics released on Tuesday showed first-quarter retail sales rose 1.2% inflation-adjusted from the previous quarter, beating market forecasts of a 1% gain.

Sales rose 4.9% year-on-year to a record A$93.19 billion ($64.51 billion), with cafes, restaurants and takeaways seeing the biggest increase as that coronavirus restrictions have eased.

Malaysia’s industrial production

Malaysia’s industrial production in March rose 5.1% from a year earlier, above forecasts, government data showed on Tuesday.

March industrial production is expected to rise 4.8%, according to 12 economists surveyed in a Reuters poll.

The production of Italian industry stagnates

Italy’s industrial production held up much better than expected in March, posting a flat reading from the previous month after a 4% jump in February, data showed on Tuesday.

A Reuters survey of 16 analysts had indicated a decline of 1.9% in March.

On a working day-adjusted annual basis, industrial production rose 3.0%, following an annual rise of 3.4% the previous month, the national statistics office ISTAT reported.

However, in the first three months of the year, production fell by 0.9% compared to the last quarter of 2021, ISTAT said.

In March, production of consumer goods, capital goods and energy products increased month on month, while intermediate goods fell.

The eurozone’s third-largest economy contracted 0.2% in the first quarter, hit by COVID-19-related restrictions earlier in the year, followed by uncertainty and high commodity prices related to the war in Ukraine.

Mario Draghi’s government last month slashed its forecast for Italy’s gross domestic product growth this year to 3.1% from 4.7% in September.

(Contributed by Reuters)

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