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Former Russian Finance Minister: Russia to have biggest economic contraction since USSR collapse

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Russia is facing rampant inflation and capital flight, and at the same time is planning the specter of a possible default, after the West imposed unprecedented economic and financial sanctions on Moscow over its decision to invade Ukraine.

The Ministry of Economy and Finance is currently working on new economic forecasts, Alexei Kudrin told RIA Novosti news agency.

“The official forecast will be for a 10% contraction,” said Kudrin, who served as finance minister in Vladimir Putin’s government from 2000 to 2011.

The Russian government’s previous forecasts were for a 3% GDP expansion this year, after a 4.7% advance in 2021.

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A source inside the Russian government told Reuters that the Ministry of Economy expects a contraction in GDP of between 10% and 15% this year.

A 10% economic contraction is the largest decline in Russia’s GDP since 1994, according to the World Bank and the International Monetary Fund.

According to a report released a few days ago by the World Bank, Russia’s Inter-Gross Product is expected to fall 11.2% this year due to the war in Ukraine.

For their part, analysts interviewed by Reuters in late March predicted an average contraction of 7.3% of Russia’s GDP in 2022, as well as inflation of almost 24%, the highest level since 1999.

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