Russia in the next three years will lose 190 billion dollars of gross domestic product, the news agency believes.
Russia has temporarily avoided an economic collapse after President Vladimir Putin’s war with Ukraine began, but this is only the first act of a slow-burning crisis that will play out for years to come. Bloomberg Economics reported this on Friday, February 17.
Russia’s economy could lose $190 billion in gross domestic product by 2026 compared to its pre-war trajectory, equivalent to the entire annual GDP of countries like Hungary or Kuwait. The imposition of sanctions continues, and the current restrictions are extended.
An analysis by Bloomberg Economics revealed several keys to the survival of Russia’s economy following the imposition of unprecedented sanctions, which include the confiscation of assets against individuals close to Putin and the freezing of more -about $300 billion in international reserves.
The need for the US and its allies to maintain access to energy forced them to compromise, balancing punitive measures with their own interests. Russia actually produces more oil, and high commodity prices mean it earns enough to support its revenue by tapping into demand from countries like China and India.
Countries with more than 30% of global GDP maintained trade relations and refrained from condemning the invasion, allowing Russia to rebuild supply chains and fight economic isolation.
Equally important to contain the damage are the emergency measures that prevented the financial collapse, according to Bloomberg Economics. Along with capital controls, a sharp rise in interest rates, which has since been reversed, averted a financial crisis. However, this comes at a cost, reducing retail lending and hurting consumption.
Although Russia’s economy recorded its third straight quarter of contraction at the end of 2022, its contraction in 2022 was only part of the nearly 10 percent drop estimated a month after the invasion.
According to analysts polled by the news agency, the decline is likely to have intensified in the last quarter year-on-year and may worsen in the first part of this year. This would be the sharpest contraction since the height of the global pandemic, with GDP falling 4.6% year-on-year in the fourth quarter of 2022.
Remember, the President of the European Commission, Ursula von der Leyen, said that the tenth package of EU sanctions against Russia provides various restrictions against the aggressor country for a total of 10 billion euros.
What are the results of the policy of sanctions against Russia
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Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.