Russia loses on the domestic front: economy thrown back years
Created: 08/14/2022, 09:00
By: Lucas Maier
While Russia continues to wage war in Ukraine, the domestic economic situation is deteriorating.
The central bank admits that the sanctions are effective.
Moscow – After the attack on Ukraine, the
rollback
in the economy of Russia follows.
Economic sanctions were imposed on Russia by the US, EU and other countries after Vladimir Putin's troops went to war in Ukraine.
These are now also noticeable in the numbers, as
Bloomberg
writes.
The Russian economist, Alexander Isakov, spoke to the US information service provider about four years of regression for the economy in Russia.
This step backwards only occurred in the first quarter of the war.
Losses for Russia: sanctions weaken economy
The sanctions and the trade war with the EU seem to be having an effect.
In 2023, the Russian economy will lose another 2 percent, according to the economist.
The reason for this is, among other things, the import stop of Russian energy into the EU.
That would depress exports, Isakov told
Bloomberg
.
Forecast from Russia: Central bank report contains crisis scenario
The Central Bank of Russia published its forecast for the next three years on Friday (12 August).
According to this forecast, the economy in Russia should return to a growth rate of 1.5% to 2.5% in 2025.
Since the end of February 2022, inflation in Russia has been significantly influenced by non-monetary factors, such as the consequences of the introduction of extensive financial and economic sanctions against Russia.
Excerpt from the three-year forecasts of the Central Bank of Russia
Should the global economy continue to deteriorate and further sanctions be imposed on Russian exports, things could get even worse for Russia's economy, according to the central bank's risk forecast (available to the editor).
The slump could be more severe than that of the financial crisis of 2009. Should this occur, the bank does not expect economic growth again until 2025.
And here the growth value of the gross domestic product is given between 0.0 and 1.0 percent.
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Scenario paints bleak future
In the scenario dubbed “Global Crisis”, the bank also expects exports to fall by between 26 and 30 percent in 2023 (compared to the previous year).
In this scenario, imports could only start growing again in 2025.
The next few years will show whether the crisis scenario of the Central Bank of Russia will materialise.
It has not yet been possible to independently confirm whether the economic slump in Russia has really been less severe so far, so far only estimates from Russia have been available.
(Lucas Maier)
