The country faces a bigger challenge than the 2009 financial crisis, Alexey Kudrin says
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Russia is looking at a “very tough” couple of years ahead, the head of the Audit Chamber and former finance minister Alexey Kudrin warned on Wednesday, as cited by RIA Novosti.
“This is a crisis that is bigger than the crisis of 2009, bigger than the crisis caused by the pandemic… For about two years we will be living in a very tough situation,” Kudrin said during a meeting of the Council of Legislators in St Petersburg, referring to the current economic pressure on Russia due to Western sanctions.
The Russian economy is expected to contract by 8.8% this year, with more conservative estimates seeing a possible decline of 12.4%, Kudrin said, citing the forecast by the Economic Development Ministry.
Core inflation rate in Russia will stand at 20.7% this year and at more than 6% in 2023, he added.
According to the former finance minister, all of Russia’s oil and gas revenues received in 2022 – an estimated 6.3 trillion rubles ($85 billion) – will be spent, and the budget will need an additional four trillion rubles ($54 billion) this year to stabilize the economy.
Previous Russian government forecasts estimated GDP growth of 3% this year after the economy expanded by 4.7% in 2021. Earlier this month, the World Bank predicted Russian GDP output would fall 11.2% in 2022 as a result of sanctions.
Earlier in April, President Putin outlined priorities to restart the nation’s economy, suggesting measures to support social programs and businesses. He also said that, overall, the sanctions have failed to break the Russian economy, as the ruble exchange rate returned to the levels of the first half of February, while commodity stocks and consumer markets were also recovering.
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