In 2022, Russia’s GDP will decrease by 11.2%, the World Bank reports on the prospects for the European economy and Central Asia against the background of the Russian invasion of Ukraine.
WB experts note that “uncertainty about forecasts is unprecedented high,” this is due to the course of hostilities in Ukraine and the reaction of the world community on what is happening. The reports of the report indicate the “harsh consequences of already imposed sanctions”, which are expected to lead to the fall of the Russian economy, largely due to the reduction of domestic demand, RBC reports.
According to the forecast of the World Bank, inflation in Russia at the end of 2022 will accelerate to 22% (in 2021 it amounted to 9%). Exports of goods and services will decrease by 30.9%, imports by 35.2%. The share of the population with income below the established border of poverty will grow up to 12.8% in 2022 from 11% in 2021 – by 2.6 million people, experts expect.
As for Ukraine, according to the current year, the reduction in the country’s GDP can be 45%. Such a forecast is based on a massive reduction in import and exports due to failures in trade, collapse in the public and private sector and a significant drop in household expenditures. “
Most of the Ukrainian workforce either fight on the front, or left the country. As a result, many companies were closed, and plants, roads and other infrastructure were destroyed by Russia.
By 2025, analysts await, the economy can grow by 5% or more, but GDP will still be significantly lower than the level, which was before the beginning of the Russian invasion. The World Bank assumes that in 2022, the share of the population of Ukraine with incomes below the subsistence minimum can reach 70% (compared with 18% in 2021th).