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and is now on a downward trend in the coming an end," says Robin Brooks, chief economists at
months, but in some countries it will remain Institute of International Finance (IIF).
high for longer than expected. This is according Germany has cut gas consumption by 20% in
to the January 2023 Global Economic Prospects 2022, more than the von der Leyen called on EU
report the World Bank released on Tuesday. members to reduce gas consumption by 15% in
"Inflation rose throughout 2022 in almost all July, however, while some of that was achieved by
economies. Median global headline inflation energy saving efforts, a significant part of those
exceeded 9% in the second half of the year, its savings were forced on Germany has many of its
highest level since 1995. Inflation reached almost biggest consumers of gas, in chemicals and phar-
10% in EMDEs, its highest level since 2008, and maceuticals in particular, were simply forced to
in advanced economies just over 9%, the highest close down after the extraordinary rise in the
since 1982. Inflation was above target in virtually price of gas was so high they became unprofit-
all countries that have adopted inflation target- able and have been forced to close.
ing," according to the report. “Germany's industrial production in the
"Global recession is coming. Germany's for- energy intensive chemical and pharmaceutical
eign manufacturing orders (black) collapsed sectors fell over -15% in 2022 data to November.
in November 2022. The domestic counterpart This is the counterpart to high storage levels of
(blue) has been weak for some time, so it's been natural gas. Whole swaths of German manu-
the resilience of global demand that's held up facturing have been shut down and likely won't
German manufacturing. That is now coming to reopen,” says Brooks.

Kremlin reverses March decree to pay debt back its energy war against Europe.
Volumes could be higher depending on the Russian President Vladimir Putin issued a
outcome in Ukraine and whether Moscow decree at the end of March requiring Gazprom’s
seeks a rapprochement in its energy ties with customers in “unfriendly” countries to pay for
Europe. Judging by its strategy so far, this can- their gas supply in rubles. The decree stated that
not be assumed. However, Russia appeared those buyers must set up accounts at Gazprom-
to be suggesting it would seek that rapproche- bank, to transfer their euro and dollar payments,
ment when the Kremlin amended a law at the as stipulated in supply contracts, for conversion
end of December to allow natural gas buyers in into rubles before being sent to Gazprom.
so-called “unfriendly” Western countries to pay The decree divided the EU, with some mem-
their debts for supply in foreign currencies. This ber states such as Poland, Bulgaria, Finland, the
is a possible sign that Moscow is looking to scale Netherlands and Denmark refusing to comply

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