If the whole world is suffering from the effects of the war that Russia launched in Ukraine, then it is clear that Moscow is no exception. In its report on Europe published on Friday, April 22, the International Monetary Fund said that inflation is expected to exceed 20% this year in Russia, and the global economy is expected to suffer in the future from a decline in energy exports.
“In Russia, sanctions and unprecedented uncertainty are expected to significantly affect investment and exports, as well as a decrease in imports and private consumption,” Summarize the report’s authors.
The International Monetary Fund stresses that the energy sector, ” Backbones “ For the Russian economy, from sanctions. But “There are indications that Russian energy exports are being shunned in the market.” “Importantly, Germany and many EU countries have already begun to decouple their economies from Russian energy sources,” he said. The report’s authors continue.
The International Monetary Fund has estimated that about 60-70% of Russia’s current demand for oil and natural gas may disappear over the next few years, This will force Russia to diversify its exports to other regions.. Something Vladimir Putin had already been expecting for some time. The Russian president already said last week “ Assuming deliveries to the West will decrease in the future.” Hence it is necessary “Reorienting our exports towards the fast-growing markets of the south and east.” And so he was targeting China, without naming it.
GDP contraction 8.5%, inflation above 20%
Earlier this week, the International Monetary Fund, which held its Spring Meetings, said it expects an 8.5% contraction in Russia’s gross domestic product, mainly due to a lower volume of exports combined to lower domestic demand.
For now, “Energy exports in 2022 are expected to reach 350 billion US dollars, an increase of 40% over last year due to higher prices” According to data released in the report on Friday. “But from next year, the decrease in the volume and price of Russian energy exports is expected to gradually reduce Russia’s current account surplus.” The authors explain.
They estimate that in the medium term, energy exports could drop to $250 billion, as the EU cuts energy imports from Russia.
As for inflation, it rose rapidly in March due to the sharp depreciation of the ruble and the shortage of some goods. however, “Recent data show signs of moderation due to the appreciation of the ruble and restrictions on food exports,” The International Monetary Fund notes. However, inflation should exceed 20% in 2022.
The report’s authors note that the government’s actions have been effective in mitigating the impact of sanctions imposed by Western countries in response to the Russian invasion of Ukraine. “Deposits and the exchange rate have almost completely recovered after the measures taken by the Bank of Russia to establish confidence in the financial system,” They note in particular.
The Russian Central Bank also expects 2022 to be difficult
The IMF forecast is similar to that revealed by the Russian Central Bank on Thursday, April 21. Analysts, questioned like every month by the Russian establishment, are already counting on a 9.2% drop in GDP and 22% inflation in 2022. This is worse than their March estimate (8% GDP contraction and 20% inflation) ).
Présentant le rapport 2021 de la Banque centrale russe devant les députés jeudi, sa présidente Elvira Nabioullina a souligné que l’économie était face à un gigantesque défi de restructuration compte tenu de l’ampleur des le qué syant commerce international impli qu syant pesantè Russia. “Almost everything has to go through changes,” She said, citing Bill Mill’s search for new suppliers, new outlets or even employment.
Take the example of sewing accessories sectors “whose main suppliers were in the European Union”, Quoting the buttons in particular. Other examples: chemicals used in the manufacture of paper and food packaging. Exchange these products “It will take time” I warned.
“We have to create (new) infrastructure, we have the means, but it will also take time. Difficulties appear in all sectors, in companies large and small,” Elvira Nabiulina indicated.
Vladimir Putin has repeatedly admitted that the sanctions created great difficulties, but also considered that the Western economic “blitzkrieg” had failed and that Russia had the opportunity to rebuild and diversify its economy, which is largely dependent on exports of hydrocarbons.