If supplies of Russian natural gas to the European Union are halted, the bloc's economy is likely to plunge into recession, officials said, BI reported.
EU economists warned that whether Moscow halts supplies or an oil embargo goes into effect, any interruption of natural gas supplies would likely push the EU into recession.
"Russia's invasion of Ukraine is causing untold suffering and destruction, but is also weighing on Europe's economic recovery," Paolo Gentiloni, European Commissioner for Economy, said in a Monday statement. "Other scenarios are possible under which growth may be lower and inflation higher than we are projecting today."
The European Commission predicts that gross domestic product will grow 2.7 percent this year and 2.3 percent in 2023, lower than the previous forecast of 4 percent and 2.8 percent, respectively.
EU economists expect inflation to outpace wage growth, leading to a 2.8% decline in real disposable household income by 2022.
Specifically, they predicted that consumer prices in eurozone countries heavily dependent on Russian energy and in close proximity to war will rise by an average of 6.1% a year in 2022, up from the previous forecast of 3.5%.
The European Commission proposed an embargo on Russian oil with a plan to give up crude oil within six months. Hungary, however, refused, warning that it would veto the move if it did not get an exception.
"In its current form, the Brussels package cannot be supported. We cannot responsibly vote for it," Péter Szijjártó, the Hungarian foreign minister, said.
An oil analyst previously told Insider that an oil embargo would undermine Russia's economy and send the country into a depression.