Russia's economic decline will continue this year

Significance

The recession was far shallower than expected; early forecasts had predicted a contraction of up to 10%. However, economic decline will continue into 2023. Unprecedented sanctions will limit the Russian economy’s ability to recover, with the focus now on enforcement.

Impacts

• The Ukraine war will increase Russian state presence in the economy.
• Import substitution projects will require an estimated USD68bn in investment in the chemicals, metals and machine-building sectors.
• New sanctions on Russian banks announced in February will further complicate external trade transactions.