“The alternative scenario “Global Crisis” assumes greater fragmentation of the global economy. Trade between countries will increasingly be concentrated in regional blocks,” specified the bank in a report published on its web portal. The regulator said this is because states are focusing less on exploiting comparative advantages and more on expanding manufacturing bases.
Likewise, the text stipulates that by the beginning of 2023, the Central Bank of Russia will take on the realization of two risks at the same time, reinforcing each other.
In this sense, he explained that high inflation in the major economies could require more and more significant monetary tightening in those countries, which would trigger a recession and less financial sustainability.
Second, this scenario assumes an increase in geopolitical tensions in the world, including the imposition of new sanctions on the Russian economy.
“The combination of these events could exacerbate imbalances in global capital and lead to a new global financial and economic crisis of a magnitude comparable to that of 2007-2008,” the bank said.
As a result of these events, the Central Bank predicts that gross domestic product in Russia will fall more sharply in 2023 than in 2022.
In this regard, he argued that the decline will continue until 2024 and a slight increase of about one percent is only possible in 2025.
The currency regulator explained that annual inflation will rise between 13 and 16 percent next year in connection with the weakening of the ruble and tightening supply-side constraints, while inflation expectations are also trending higher.
The day before, the Center for Macroeconomic Analysis and Short-Term Forecasts reported that the Russian economy will reach its planned growth in 2025 and will continue to grow at the level of 2.2-2.7 percent until 2030.
According to the investigating body, this will happen if Moscow is able to guarantee imports, bring products to new markets and implement technological import substitution. “Otherwise, growth is between 1.3 and 1.9 percent,” he emphasized.
After the start of the Russian military operation in Ukraine on February 24, numerous countries condemned the measures taken by Moscow and activated several batteries of individual and sectoral sanctions aimed at increasing the cost of the conflict to the Kremlin.
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