Bloomberg: A deep recession is predicted in Russia due to Western sanctions. Next year, the economic decline will accelerate

Oleksiy Yarmolenko

The Russian government predicts a deep recession due to Western sanctions. There, they fear a serious decline in some sectors of the economy and a mass "brain drain" from the country.

This is stated in the internal report of the Russian government, which was reviewed by Bloomberg.

For now, they have prepared three possible scenarios for the development of the economy until 2030, all of which predict a fall in GDP at least until 2024.

The first forecast is targeted. He predicts that in 2022 the economy of the Russian Federation will fall by 2.9%, in 2023 — by 3.8%, in 2024 — by 1.3%, but in the following years it will begin to grow and in 2030 will reach the indicator 16.9% growth of the economy.

The second forecast — inertial — predicts that the Russian economy will resume growth as early as 2028. The biggest drop is expected in 2023 — by 8.3%.

The third forecast — stressful — predicts that the Russian economy will not be able to resume growth until 2030. According to this forecast, even in 2030, Russian GDP will fall by 3.6%, and the biggest drop is predicted for 2024 — as much as 11.9%.

All these forecasts are based on the fact that Western countries will continue to strengthen sanctions, and that restrictions will be introduced by those states that have not yet introduced them.

The report also describes in detail how Russia actually faced a "blockade" that affected almost all areas of transport. This greatly complicates trade with other countries. The government also predicts the flight of specialists abroad — they believe that up to 200 000 IT specialists will leave Russia by 2025.

In the coming years, some sectors of the Russian economy risk almost complete collapse or cease to be "drivers of the economy." We are talking, first of all, about the oil and gas industry. The ban on the sale of gas will lead to a loss of about $6.6 billion in revenues, which will not be compensated even in the medium term.

In addition, the report describes some industry-specific scenarios. For example, they note that in agriculture, 99% of bird breeding depends on foreign imports. This also applies to seeds for some crops. In aviation, 95% of passenger traffic is carried on Western planes. In mechanical engineering, only 30% of equipment has Russian parts. In pharmaceuticals, almost 80% of production depends on foreign raw materials.

  • The war against Ukraine set the Russian economy back four years during the first quarter after the full-scale invasion. The decline is less steep than initially anticipated, but Russia is still on track for one of the longest recessions in its history. Russiaʼs economy, which showed signs of growth at the beginning of 2022, declined sharply in the second quarter. Data published on August 12 showed that the gross domestic product of the Russian Federation decreased by 4% year-on-year for the first time in a year.