Analysts collaborating with the Russian Central Bank expect the GDP to decline by 9.2% and inflation to reach 22% in 2022. The bank itself foresees serious economic difficulties due to the international sanctions imposed on Moscow. The Central Bank publishes research monthly in cooperation with experts, and these experts appeared more pessimistic in April compared to March regarding economic growth, due to waves of sanctions hitting Russia following its invasion of Ukraine.
Experts predict a GDP decline of 9.2% for 2022, up from their previous expectations of an 8% decline last month, with inflation expected to hit 22% (up from 20%), according to the latest report released on Thursday. These figures are more pessimistic than those from the International Monetary Fund, which predicts an 8.5% contraction of the Russian GDP this year.
**Sanctions Challenge**
During a presentation of the bank's 2021 report to lawmakers on Thursday, Central Bank Governor Elvira Nabiullina noted that the Russian economy faces a significant restructuring challenge due to the scale of sanctions impacting the financial system and international trade involving Russia. She stated that "almost everything needs to undergo changes," referring to the search for new suppliers, new markets, and even labor.
Nabiullina emphasized in her speech, published online by the Central Bank, that "exporters need to find new logistical arrangements, as many ports are closed to Russian ships, and there are restrictions on our vessels to the European Union." She elaborated that "new infrastructure needs to be created; we have the resources, but that will also take time. It seems there are difficulties across all sectors, for both large and small companies."
Russian President Vladimir Putin has repeatedly acknowledged that sanctions pose significant challenges, but he also considered the Western "blitz" economic attack a failure and stated that Russia has the opportunity to rebuild and diversify its economy, even though it largely depends on energy exports.
