Bloomberg: The Ministry of Finance of Russia predicts the worst decline in the economy since 1994

The Russian economy may experience the strongest decline in almost 30 years amid intensifying sanctions by the United States and their allies, Bloomberg reports with reference to sources in the Russian Ministry of Finance.

According to the publication, according to the internal forecast of the department, in 2022, Russian GDP can be reduced by 12%, although the Ministry of Economic Development expected a reduction by 8%. In this case, the fall will become the largest since 1994, when GDP has decreased by 12.6%. According to the source, the fall has the growth of the Russian economy over the past 10 years.

The fall of the Russian economy is affected by the ban on oil supply, the EU rejection of Russian gas, as well as the departure from the country of foreign companies, says Natalya Lavrova, chief economist of the BCS Financial Group in Moscow. According to its forecast, taking into account only existing sanctions, GDP in 2022 will decrease by 10.8%, and in 2023 - by 5%. The Central Bank in April predicted the fall of the economy at 8-10%, the International Monetary Fund-8.5%.

The Russian Ministry of Finance stated that information about the possible fall in Russia's GDP in the results of 2022 to 12% is not true. The department noted that the preparation of such forecasts is not included in their duties. Measures taken by the Government and the Bank of Russia "will largely stop the negative consequences from the sanctions and ensure stable development of the economy," the Ministry of Finance said.

• Since February 24, the Russian army has been conducting military operations in Ukraine, the purpose of which was originally called "denacification and demilitarization" of the country. With the outbreak of war, which the Russian authorities call the "special operation", developed countries imposed sanctions against Russia, and more than 200 foreign brands have left the Russian market.