19 Sep, 2022
NATURAL GAS SHORTAGE WILL STIFLE ECONOMIC GROWTH, ANALYSTS WARN
Italy is at risk of losing up to 582'000 jobs due to the energy crisis and the resulting economic downturn, national media reported on Sunday, citing a study by the Confindustria Association of Industrialists.
According to the findings, if the gas price stays at its current level (the August average was €235 per megawatt-hour), Italy's economy will shrink 2.2% next year and the country will lose up to 383'000 jobs in 2022-2023.
However, if the price hits €298 per megawatt-hour, which is the predicted level based on current gas futures, Italy may suffer a 3.2% decline in its GDP and lose hundreds of thousands of jobs.
According to the analysts, if Russia shuts down gas supplies altogether from October, Italy could be about 8% (6.4 billion cubic meters) short of the gas it needs to cover demand, taking into account available alternative supplies and reserves. Such a shortage could lead to mass closures of businesses and industries in the country.
Italy relies on imports for nearly 75% of its energy consumption. At the start of this year, it was importing 40% of its gas from Russia, but in July its Russian purchases dropped to 25% due to sanctions. Earlier this month, Italy lost much of its supplies from Russia when Gazprom halted flows via the Nord Stream 1 pipeline due to technical issues. ITALY'S ECONOMY MINISTER DANIELE FRANCO RECENTLY WARNED THAT THE COST OF ITALY'S NET ENERGY IMPORTS COULD DOUBLE TO €100 BILLION THIS YEAR, OR 3% OF GDP.