Economy: Russia faces the worst economic slump since 1994
April The Russian government is expecting the worst economic downturn since 1994 because of the western sanctions following the Russian invasion of Ukraine.
That will emerge from the new forecasts by the Ministry of Economy and Finance, said Kudrin, who himself headed the finance department under President Vladimir Putin from 2000 to 2011.
A government insider told Reuters news agency that gross domestic product is expected to fall by between 10 and 15 percent. According to data from the World Bank and the International Monetary Fund (IMF), the last time there was a double-digit minus was in 1994 following the collapse of the Soviet Union. Moscow originally planned economic growth of three percent for 2022, after 4.7 percent last year.
Consumer prices, on the other hand, are likely to rise sharply. Analysts polled by Reuters expect an average inflation rate of almost 24 percent in the current year. That would be the strongest inflation since 1999.
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According to official data, consumer prices rose nearly 17 percent year-on-year in March, up from 9.15 percent in February. Sugar cost 44 percent more than a month earlier, onions and washing machines each around half more. The Russian central bank is actually aiming for an inflation rate of four percent.
Russia invaded Ukraine on February 24. The western allies then put together sanctions that have since been tightened several times. For example, Russia was largely cut off from the Swift international payment system, and trade in high technology, for example, was severely restricted.
More: Read all developments in the Ukraine war in the live blog