The main instrument of the world’s central banks to combat inflation today is tightening monetary policy, and in particular, raising the interest rate. The US Federal Reserve System, the European Central Bank, the Swiss National Bank and the Bank of England are making efforts to curb inflation to varying degrees, CNBC writes.

But according to the CEO of Deutsche Bank (ETR:DBKGn) Christian Sevinga,

“If there is a sudden cessation of Russian gas supplies, the probability that the recession will come earlier will be much higher. There is no doubt about it.”

According to Seving, in general, a very difficult situation has developed without taking into account the conflict, so the probability of a recession in Germany or in Europe as a whole in 2023 or a year later is higher than in any of the previous years. To do this, it is enough to look at inflation and its impact on the monetary policy of central banks.

Along with inflation caused by the situation in Ukraine and related sanctions against Russia, a failure in logistics chains has also led to a deadlock due to revived post-pandemic demand and the return of quarantine due to COVID-19, especially in China.

“This is such a difficult situation in which there are 3-4 driving forces that can seriously affect the economy, and all of them together at the same time have an impact on it, while the director of the German bank is increasingly reluctant to rely on traditional models, since the economy is facing a “real storm”, which in the end may cause a recession.”

“We need to fight inflation because, after all, inflation is the biggest poison for the economy.”

Also, Hungarian Minister of Foreign Affairs and Foreign Economic Relations Peter Szijjarto said that gas prices for Europeans could rise 4-5 times due to the events in Ukraine. Speaking in Budapest on June 21, he stressed that it is still unclear whether it will be possible to restore the global growth in energy prices in the long and short term. In his opinion, the energy crisis in the world arose due to the events in Ukraine, the subsequent sanctions against Russia, including due to the EU’s intention to gradually abandon oil and gas supplies.

“The whole of Europe is waiting for a twofold increase in fuel prices, a fourfold or five-fold increase in gas prices,” he said during the opening ceremony of the office of the “daughter” of the American oil company ExxonMobil.

Peter Szijjarto added that the Hungarian government considers ensuring safe energy supply a priority in its work and seeks to diversify energy supplies. That is why nuclear power plants will be built in the country. In addition, the Government has already concluded long-term agreements for the purchase of natural gas both in the eastern and western directions.