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IMF sees heavy hit to German economy from Russian gas stop

AFP

Halting Russian gas supplies to Germany would cost Europe’s largest economy 1.5 percent of its GDP in 2022, the International Monetary Fund said Wednesday, as concerns mount that Moscow will further squeeze supply.

This year’s loss would be followed by a negative impact of 2.7 percent in 2023 and a 0.4-percent reduction in 2024, according to an IMF forecast where gas deliveries were assumed to have stopped on June 1.

A potential shutoff “could cause sizable reductions in German economic activity and increases in inflation”, the IMF said in a statement.

Supplies to Germany from Russia are currently at zero as the Nord Stream pipeline undergoes maintenance, after Moscow initially slashed deliveries by 60 percent in mid-June citing a delayed gas turbine repair.

Berlin has rejected Gazprom’s turbine explanation and believes Russia is squeezing supplies in retaliation for Western sanctions on Moscow over its invasion of Ukraine.

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Works on the pipeline are due to finish Thursday, with officials watching closely to see if and at what levels supplies resume.

The risks for the economy from a complete shutdown, as well as a weak global economy and widespread supply bottlenecks “loom large”, the IMF said.

The same headwinds meant that German “growth is likely to be muted in the coming quarters”, it said.

In its standard forecast, the IMF sees the German economy growing by 1.2 percent in 2022 and just 0.8 percent in 2023.

Meanwhile, the rising price of energy associated with the gas supply reductions already seen also meant that inflation is “likely to remain elevated in the next two years”, the IMF said.

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The IMF forecast inflation in Germany to sit at 7.7 percent in 2022 and 4.8 percent in 2023.

A complete Russian gas shut-off could potentially increase those figures by up to two percentage points in 2022 and 3.5 percentage points in 2023 in an “extreme” scenario where Europe struggles to source alternative supplies, it said.

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International

India asks to identify Pakistani citizens in the country to ensure their departure before Sunday

The Indian government asked regional executives on Friday to identify all Pakistani citizens in their territories to ensure that they leave India once the deadline granted by the authorities to leave expires on April 27.

This measure was transmitted today to the heads of government of the different Indian states by the Minister of the Interior, Amit Shah, according to official sources cited by several media in the country.

Pakistani citizens must leave the country before April 27, following the order issued yesterday by the Indian Government, in which it indicated that all visas issued to nationals of the neighboring country will be revoked from that moment on.

He only made an exception with medical visa holders, to whom he granted until April 29 to leave India.

The order has increased transit at the only land crossing between India and Pakistan, known as the Attari-Wagah border, to where Pakistani citizens have traveled today to leave the country.

The suspension of visas is part of a series of measures ordered last Wednesday by New Delhi, in response to the terrorist attack perpetrated the day earlier in Indian-run Kashmir, in which 26 people died.

The Indian government said it had indications that the attackers had the support of Pakistan, which New Delhi accuses of sponsoring the insurgency in Kashmir, which has caused a serious diplomatic crisis between the two nations.

In response to India’s measures, Pakistan suspended some visas for Indians and closed its side of the border – in reciprocity with New Delhi. It also closed its airspace to Indian airlines and announced the suspension of all bilateral agreements with India.

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International

At least nine injured, including two children, in new US bombings in Yemen

At least nine people, including two children, were injured this Wednesday in a new wave of bombings carried out by the United States against at least four cities in Yemen under the control of the Houthi rebels, reported media affiliated with the Iranian-backed Shiite movement.

Al Masirah, spokesman for the Houthis, reported that at least “seven women and two children were injured in the US attack” in the Al Thawra district of Sana, the capital of Yemen controlled by the insurgents since 2014.

According to the chain, the bombings also targeted “the surroundings of the city of Saada”, north of the capital; the northern town of Hazm, in the governorship of Al Jawf; and a district of the city of Al Bayda, in the center of the country.

At least two missiles hit the capital’s neighborhood of Al Jeraf, on the road that leads to Saná airport, according to EFE.

Large columns of smoke and a large fire could be observed from different points of the city, while ambulance teams and firefighters went to the scene of the attack, which according to witnesses was aimed at a deposit.

Al Masirah added that one of the attacks hit “a celebration hall under construction in a residential neighborhood in the Al Thawra district” and, in Al Jawf, destroyed a farm and killed several head of cattle.

This new wave of bombings came minutes after US President Donald Trump warned that Iran must completely and immediately cease its support for the Houthis, not just reduce it, and threatened the latter that they will be “completely annihilated” if the attacks against Israel and the Red Sea do not cease.

The Republican leader estimated on his social network, Truth Social, that “tremendous damage” has already been inflicted on the Houthis and stressed that “the situation will progressively worsen.”

At the weekend, the United States began a series of airstrikes against different cities controlled by the Houthis in northern and central Yemen, as well as in the capital, Saná, bombings that resulted in more than fifty deaths.

 

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International

China celebrates the call between Trump and Putin and affirms that dialogue is the “only way out” of the war in Ukraine

China said on Thursday that the dialogue is “the only way out” to the war in Ukraine and held the talks held on Wednesday by US President Donald Trump and Russia President Vladimir Putin, who agreed to start “negotiations immediately” to end the conflict.

“Russia and the United States are influential powers and we welcome them strengthening the dialogue. Regarding Ukraine, dialogue is the only way out of the crisis. From the beginning, Chinese President Xi Jinping has advocated for peace talks,” Foreign Ministry spokesman Guo Jiakun said at a press conference.

The spokesman added that China “will continue to make efforts” for peace and that it will play “a constructive role” to end the European conflict.

He also reiterated that China supports “any effort that leads to peace” and emphasized that the Asian country hopes to “maintain communication with all parties” for this purpose.

The possibility of Russia and Ukraine starting peace negotiations for the first time in almost three years of war multiplies after that call between Trump and Putin, to which we must add the one made by the American with the Ukrainian president, Volodymyr Zelensky.

This Friday, the US Vice President, J.D. Vance, will meet on the margins of the Munich Security Conference, which will be attended by China’s Foreign Minister, Wang Yi.

Since the beginning of the war in Ukraine, China has maintained an ambiguous position from which it has called for respect for “the territorial integrity of all countries”, including Ukraine, and attention to the “legitimate concerns of all countries”, in reference to Russia.

Beijing has opposed “unilateral” sanctions against Moscow and advocated for “a de-escalation and a political solution”. However, the West has accused China of supporting the Russian military campaign, something it has always denied, and of supplying Putin with key components he needs to produce weapons.

In addition, European countries have repeatedly asked Chinese leader Xi Jinping to use his influence on Putin to end the conflict, but the Asian country has given priority to strengthening its relations with Russia, a country from which it imports oil and gas at a lower cost.

China has limited itself to presenting peace initiatives that have had a lukewarm reception in the West, such as the plan it presented last year together with Brazil that did not include the withdrawal of Russian troops and that was rejected by Kiev.

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