Bloomberg: Russia is facing an economic downturn - the worst since 1994

This is a setback in the nineties: after the start of the “special operation” in Ukraine, the Russian economy will face the strongest decline in three post-Soviet decades. This is stated in the internal forecast of the Russian Ministry of Finance, which was studied by Bloomberg journalists.

This year, Russia's GDP is likely to decline by 12%, according to documents from the US Treasury. If this forecast is correct, it will be the worst economic contraction since 1994, when Russia lost 12.6% of its GDP due to the abrupt transition to a market economy. Decades of economic growth will simply be erased, said a Bloomberg source familiar with the forecasts. Since 1999, this figure has grown almost continuously, with the exception of 2009 and 2015, when the economy suffered losses due to the global financial crisis and due to sanctions imposed in response to Russian aggression in Ukraine and the annexation of Crimea, respectively.

But even then the losses were not so severe - minus 7.8 percent of GDP in 2009 and minus 2 in 2015.

The Bank of Russia itself also predicts negative GDP growth - but only between 8 and 10 percent. This discrepancy in forecasts is due to the fact that it is not yet clear how long the “special operation” will last and, accordingly, whether any other sanctions will be introduced because of it, Bloomberg sources say.

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Source: Bloomberg