The Russian economy is heading for a contraction of more than 10 percent this year. That would be the biggest drop in the gross domestic product (GDP) since the years after the collapse of the Soviet Union in 1991, said former finance minister Alexei Kudrin.
He currently heads the Russian Court of Auditors and is Minister of Finance from 2000 to 2011.
Russia is struggling with rising inflation, partly due to the sanctions for the invasion of Ukraine. In addition, there is a capital flight, the massive transfer of assets across borders. The sanctions against the country also mean that Russia faces a debt crisis.
According to Kudrin, the Russian ministries of economy and finance are currently working on new forecasts. He tells the Russian news agency RIA that the contraction will be around 10 percent according to these estimates. Earlier estimates by the Russian government had forecast gross domestic product growth of 3 percent this year after the economy grew by 4.7 percent in 2021.
Insiders reported to Reuters news agency that the contraction might be as much as 15 percent. A 10 percent contraction would be the biggest GDP decline since 1994, according to data from the World Bank and the International Monetary Fund (IMF).
The World Bank forecast that the Russian economy would shrink by 11.2 percent this year. Experts recently predicted a decline in GDP by 7.3 percent for this year. They also predicted a rise in inflation to almost 24 percent. That would be Russia’s highest inflation since 1999.