Russia’s Economy Crashes from Sanctions, Takes Years to Recover

MOSCOW, KOMPAS.com – Russia is predicted to take years to rebuild its economy, if Western sanctions over the invasion of Ukraine remain in effect for long.

“If sanctions remain at current levels, it will take about two years of reconstruction, no less,” said the head of the Audit Chamber and former Russian finance minister Alexei Kudrin, Wednesday (13/4/2022).

“Then we have to rebuild for years because what we are talking about is replacing the whole set of imported products,” he was quoted as saying by Russian news agencies.

Read also: As a result of the Invasion, Russia’s Economy Headed for Its Biggest Contraction since 1994

Kudrin also said that the already soaring inflation could reach 20 percent by the end of this year.

President Vladimir Putin said that the Russian economy managed to overcome an unprecedented barrage of sanctions imposed since Russian invasion to Ukraine on February 24.

However, economists believe that the worst economic impact of the sanctions is yet to come and expect Russia, which relies heavily on imports of manufacturing equipment and consumer goods, to plunge into a deep recession.

“One of the main risks today is the economic contraction due to logistical restrictions on the one hand and lack of liquidity on the other,” Russian Deputy Prime Minister Andrei Belousov told the upper house of Russia’s parliament. AFP.

Read also: Russia-Ukraine War: Why Are Putin’s Troops Losing So Many Tanks?

Belousov added that the industrial and trade sectors contracted 11 percent due to Russian sanctions.

To support the economy, the state budget was increased by 20 percent year-on-year in the first quarter of this year, he said.

The Russian government has not released a growth forecast for 2022, but the World Bank is forecasting an 11.2 percent decline in GDP.

Read also: Russia: Over 1,000 Ukrainian Soldiers Surrender in Mariupol

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