The shock to Russia’s GDP will be similar to the 1998 crisis

The shock to Russia’s GDP will be similar to the 1998 crisis


© Reuters. General view of the Moscow International Business Center, also known as “Moscow-City”, as the spread of coronavirus disease (COVID-19) continues in Moscow, Russia, May 14, 2020. REUTERS / Maxim Shemetov


LONDON (Reuters) – JPMorgan (NYSE 🙂 said on Thursday that it expects the Russian economy to shrink by 35% in the second quarter and 7% in 2022 with an economy that has suffered a decline in economic production comparable to the 1998 crisis.

“Russia’s GDP is now expected to fall from a peak to a low of around 12%, compared to the crises of 1998 (~ 10%) and 2008 (~ 11%) and the shock of COVID-19 (~ 9%)” , Anatoly Shal from JPMorgan said in a note to clients.

This year, JPMorgan expected a decline in exports by about 13%, domestic demand by about 10% and imports by about 30%.

“What is clear is that Russia’s growing economic and political isolation will lead to lower growth in the long run,” Shal added.

“We expect Russia’s growth to be around zero next year (up from -1.0% earlier) and a growth trend of around 1% in the long run.”

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