According to updated predictions from its central bank, the Russian economy will see more stagnation than any other major country this year, according to the Wall Street Journal.
As the gains of high energy prices and the tightening of Western sanctions are faded, and the country’s suffering to replace Europe as a major oil and gas buyer, experts expect a significant deterioration of the Russian economy.
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 predicted that the economy would contract between 8% and 10% this year, with a rate of up to 3% in the following year, and that the GDP would contract between 1% and 4% in the following year.
Before Russia invaded Ukraine, the central bank predicted that the economy would expand by up to 3% in 2022, which indicates that the war lost the nation more than 7% of its GDP.
With policymakers’ achievement in the stability of the currency and the financial system in the wake of Western sanctions, the Central Bank of Russia left the main interest rate steady in the first meeting since March, followed by six consecutive discounts in interest rates to 7.5% from 20%.
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.
based on data released by the government’s statistical agency on Wednesday.
According to the Bruges Research Institute, by 2030, Russia’s proportion of global oil and gas exports might be cut in half.
According to experts, Russia’s economy is experiencing the worst slump.
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