The IMF warned Tuesday that if Russia cuts off its natural gas supplies to the European Union, it could cause deep recessions in Hungary, Slovakia, the Czech Republic, and Italy.
IMF researchers said in a blog post that Hungary would hurt the most from losing access to Russian gas and could face a loss of over 6% of its gross domestic product (GDP). Since Hungary is so reliant on Russian energy, its President Viktor Orban secured an exemption from the EU’s ban on Russian oil.
Orban is also less hostile toward Russia than most EU members, so it’s possible Hungary could be spared from a Russian gas embargo unless Moscow decided to cut its supply to the entire bloc. So far, Russia has cut off some EU members over their refusal to pay for gas in rubles, and other supplies have been reduced due to Western sanctions.
The IMF said the economic pain could be offset if EU nations step up cooperation to share alternative supplies. Under the IMF’s best-case scenario, Germany, Europe’s largest economy, will shrink its GDP by about 1%. In the direst scenario, Germany’s GDP will be reduced by nearly 3%.
The EU is expecting Russia to cut off its gas supplies and is working on plans for energy cuts, which are expected to be proposed by the European Commission. According to The Associated Press, early leaks of a proposed plan asked EU members to reduce their consumption of gas by 15%.