The fall in Russia’s GDP due to the imposition of Western sanctions may exceed 10% of GDP. And these are not all of the problems facing the Russian economy. This stark assessment is according to data contained in a report from the Russian portal, Frank Media (frinkrg.com). This report was prepared to assess the consequences of the West’s imposition of tough sanctions and was prepared by experts from Russia’s Central Bank and the two largest banks, Sberbank and VTB, and presented to the Russian leadership. However, the report was based on the assumption that Russia’s military aggression will not go beyond the Donbas. However, even in this scenario, financiers predicted catastrophic consequences for the Russian economy. Thus, it is expected that Russia’s GDP will fall by at least 10%, the number of unemployed will increase from 4% to 12%, and the base rate of the Central Bank will increase to 20-30%; the rate is currently at 20%. Another problem is the urgent need for recapitalization of sanctioned banks. This will require 5-6 trillion rubles. At the current rate this would require 45-51 billion euros.
The collapse of the Russian economy and the first effects of imposed sanctions.
