Russia’s central bank expects the country’s economy to contract by 4-6% this year and 1-4% in 2023, before returning to positive growth in 2024.
Last month, the finance ministry said the economy contracted 4% in the second quarter, after growing 3.5% in the previous three months.
The contraction is a sign that unprecedented restrictions imposed by the EU, the United States and other countries supporting Ukraine are starting to bite, observers say.
Sanctions targeting Russia’s energy exports have led to higher energy prices, which has partly cushioned their impact, as well as emergency measures by Moscow to maintain a strong currency.
But bans on tech shipments have halted manufacturing, and the slowdown is expected to continue in 2023 as an EU ban on most oil exports from Russia takes effect at the end of the year. restricting export revenues that have been Russia’s lifeline. economy.
The Kyiv School of Economics recently wrote that once its oil and gas revenues fall, “Russia will then face a stark choice between high inflation and tighter policy. Either way, its ability to sustain its economy and to continue its imperial war of aggression in Ukraine will be significantly altered,” he said.
Separately, Russia’s National Settlement Custodian on Friday filed a complaint with the EU Court of Justice in Luxembourg seeking the lifting of the sanctions imposed on it by the bloc, arguing that they are “unlawful and unjustified and that “international investors have suffered as a result.” Russia has already gone into technical default by missing a bond payment deadline in June, citing force majeure and arguing that his inability to pay was due to Western sanctions.