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Russia's economic system is no longer likely to return to pre-war levels before the end of this decade, because the war in Ukraine and tighter sanctions are exacerbating long-standing financial deficiencies, according to Scope ratings cited in a report reviewed with the help of Reuters on Friday. .
By the end of 2023, gross domestic product (GDP) could be about 81% below 2021 output, according to the forecast from the credit rating watchdog.
The Russian financial system grew by 4.7% in 2021, according to the federal information provider Rosstat.
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After 2023, the increase in the advantage will fall to 1.0-1.5% per year, from the 1.5-2.0% achieved before the conflict, the company stated.
It is suspected that capital outflows from Russia this year, according to The Scope, will exceed the US$152 billion withdrawn from Russia's annexation of Crimea in 2014. In the photo: an adult shops decently at a Russian market in Omsk, Russia, on October 29, 2021. (REUTERS/Alexey Malgavko/File photo/Reuters)
“The Russian government, aided by the Bank of Russia, used unexpected export revenues to mitigate the immediate domestic economic impact of the battle in Ukraine and the sanctions; however, the long-term outlook has worsened,” noted Scope analyst Levon Kameryan.
The report states that accelerating capital outflows, limited entry based on Western experience, and dire demographic trends will stifle growth and exacerbate the consequences of war and sanctions in the absence of any massive financial restructuring.
Approximately four times the deepest capital – US$64.2 billion – left Russia in the first quarter of 2022 compared to the same quarter last year, the report noted.
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The Scope report predicts that the deepest sector will withdraw more capital from Russia this year than the US$152 billion withdrawn in 2014, when Russia annexed Crimea.
