Analysts at Deutsche Bank expect a recession in the economies of Germany and the United States, MarketWatch reports.

In their opinion, there have been serious changes in the markets after the publication on July 13 of data showing an acceleration in consumer price growth in the United States in June. Based on the move in U.S. equities and the U.S. dollar, which reached parity with the euro on Thursday, experts point out that futures markets now have a 100% chance of a recession in the U.S. economy before the end of 2022.

Recession risk has supplanted inflation as the most important factor influencing the markets.

Deutsche Bank experts also predict that the German economy will decline by about 1% in 2023.

The reduction in natural gas supplies, the economic downturn in the US and other negative factors will lead to the fact that the German GDP will begin to decline in the second half of this year. Analysts also said that record inflation has not yet reached its peak, writes Bloomberg.

The recent reduction in energy supplies from Russia has caused alarm in Europe, especially in Germany due to its heavy dependence on Russian gas. The key concern is that the Kremlin may use repairs to the Nord Stream 1 gas pipeline as an excuse to completely cut off supplies.

„It seems reasonable to assume that Russia will continue to look for ways to undermine economic activity in Europe in response to Western sanctions and financial and military support for Ukraine,” Deutsche Bank said.

„This may not necessarily mean a complete shutdown,” the experts said, but „the impact on industrial production and economic uncertainty will almost certainly push the German economy into recession in the second half of 2022.”