Economists at JPMorgan Chase & Co. expect a 7% contraction in Russia’s gross domestic product (GDP) in 2022. This forecast points to the biggest drop recorded in the last quarter of a century, which was recorded in 1998, when GDP shrank 5 .3% in the midst of a financial crisis marked by high rates of indebtedness, unemployment and inflation.
JPMorgan’s forecasts are shared by Goldman Sachs, which also expects a 7% contraction, while Bloomberg Economics predicts a drop of around 9%, explains ‘Bloomberg’.
The Russian economy is currently suffering from sanctions imposed by the West for the decision to attack Ukraine. The sanctions apply to trade, finance and travel, and its central bank’s reserves have also been frozen and Russian banks’ access to the Swift messaging system has been cut off.
“Sanctions will hit their mark on the Russian economy, which now looks set for a deep recession,” said JPMorgan economists, led by Bruce Kasman, according to Bloomberg.
To make the country’s economic situation worse, several companies have already marked their position in relation to the conflict on Ukrainian territory, blocking their operations in Russia.