Russia’s economy is shrinking by more than 10 percent in 2022, the biggest drop in gross domestic product since the years following the collapse of the Soviet Union in 1991, former Finance Minister Alexei Kundrin said today.
Russia is facing a spike in inflation and capital flight while trying to manage a possible default on its debt. the West imposed sweeping sanctions to punish President Vladimir Putin who sent tens of thousands troops in Ukraine on February 24th.
Russia’s economy and finance ministries are currently working on new forecasts, said Kudrin, who now heads the Audit Office, according to the state-run RIA news agency.
“The official forecast is for a shrinkage of more than 10%,” said Kundrin, who served as Putin’s finance minister from 2000 to 2011, according to RIA Novosti.
Previous forecasts of the Russian government put the growth of gross domestic product at 3% this year, following a growth rate of 4.7% in 2021.
A source close to the Russian government, who spoke on condition of anonymity, told Reuters that the economy ministry was forecasting a 10% to 15% reduction in GDP this year.
A 10% contraction would be the biggest drop in gross domestic product since 1994, according to the World Bank and the International Monetary Fund.
The World Bank forecast this month that Russia’s GDP would fall by 11.2% this year.
Analysts in a Reuters survey in late March forecast an average shrinkage of GDP in 2022 by 7.3%, forecasting an increase in inflation to almost 24%, the highest level since 1999.
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