According to the Wall Street Journal, Russia is experiencing a scary standstill that will be worse than that of any other major economy this year.
Experts anticipate a dramatic decline in the Russian economy as a result of high energy costs, tighter Western sanctions, and the nation’s struggle to displace Europe as a key oil and gas customer.
The effects of the sanctions and the exodus of Western businesses following the invasion of Ukraine in February hurt the Russian economy.
With the global economy slowing down and the West exploring alternatives to Russian energy, economists predict a steep decline in income. Meanwhile, Russia has profited from this year’s high oil prices.
The anticipated drop is probably going to be the biggest ever recorded by one of the 20 largest economies, according to the American daily.
The Russian bank expected, immediately after the invasion, that the economy will shrink between 8% and 10% this year, with a rate of 3% in the next year, and the gross domestic product will be expected to shrink between 1% and 4% in the next year.
The central bank predicted that the economy would expand by up to 3% in 2022 before Russia invaded Ukraine, which indicates that the war cost the nation more than 7% of its GDP.
The Central Bank of Russia kept the main interest rate unchanged in the first meeting since March, followed by six consecutive discounts in interest rates to 7. 5 percent from 20% with the success of policymakers in stabilizing the ruble and the financial system in the aftermath of Western sanctions.
The Central Bank issued a warning that if Russia experiences tougher sanctions or weaker demand than the current state of the global economy, the economy may experience a bigger decrease in production the following year.
The goal of the European Union is to enact further sanctions against the export of Russian crude oil.
The bank stated that the government’s decision to hire an additional 222,000 soldiers in September may potentially have an impact on growth.
Some areas of the economy have suffered greatly as a result of the sanctions and the voluntary withdrawal of Western businesses.
According to the Berjel Research Institute, by 2030, Russia’s proportion of global oil and gas exports could be cut in half.
American newspaper: There is a terrifying stagnation in Russia.
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