Putin profits from energy crisis as war slows growth across Europe

VLADIMIR PUTIN is profiting from the energy crisis as ballooning oil and gas prices prop up Russia’s economy while the war in Ukraine batters European nations.

The International Monetary Fund slashed its growth forecasts for almost every country as energy shortages, food costs, higher interest rates and China’s Covid lockdowns sap the economy to leave the world “teetering on the edge of a global recession”. Britain is still expected to be one of the fastest growing rich countries this year, with GDP expanding by 3.2pc in 2022.

However, it is on course to be the weakest performer in the G7 next year with growth of just 0.5pc in 2023, less than half the 1.2pc expansion which the IMF had predicted back in April, as Britain suffers one of the highest inflation rates of any developed economy, peaking at 10.5pc later this year.

By contrast, the IMF upgraded its predictions for Russia’s growth as the warmongering nation capitalises on its control of key energy supplies. The IMF said: “Russia’s economy is estimated to have contracted during the second quarter by less than previously projected, with crude oil and non-energy exports holding up better than expected.

“In addition, domestic demand is also showing some resilience thanks to con- tainment of the effect of the sanctions on the domestic financial sector and a lower-than-anticipated weakening of the labour market.”

Russia’s economy is expected to shrink by 6pc this year, marking a painful recession, but one which is far less severe than the 8.5pc drop that was predicted in April.

The US economy is slowing sharply, from growth of 5.7pc last year to 2.3pc this year and 1pc next.

“A technical recession may already have started” in the world’s largest economy, the IMF said.

Similarly the eurozone is on track to grow by 2.6pc this year and 1.2pc in 2023, barely half the pace previously anticipated for next year.

“The war’s effects on major European economies have been more negative than expected, owing to higher energy prices as well as weaker consumer confidence and slower momentum in manufacturing resulting from persistent supply chain disruptions and rising input costs,” the IMF said, adding there is a roughly one-in-four chance of Germany falling into recession.

China will grow 3.3pc this year – one quarter slower than previously estimated – and 4.6pc next year.

Pierre-olivier Gourinchas, director of research at the IMF, said: “The outlook has darkened significantly since April. The world may soon be teetering on the edge of a global recession, only two years after the last one.”