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Shock to Russian GDP will be akin to 1998 crisis -Breaking

by Mike Robinson

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© Reuters. An overview of Moscow International Business Centre (also known as Moskva-City) as coronavirus spreads. Moscow, Russia. May 14, 2020. REUTERS/Maxim Shemetov

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LONDON (Reuters), JPMorgan (NYSE ) announced on Thursday that Russia’s economy would contract 35% by the end of the second quarter, and 7% by 2022. The economy is expected to suffer an economic output decrease comparable to that experienced during the 1998 crisis.

In a note to clients, JPMorgan stated in an article that “a peak-to–trough decline of Russian GDP is now anticipated at approximately 12%.” This compares to 2008 (11%) and 1998 (10%) crises.

JPMorgan expects exports to fall around 13% in this year’s, while domestic demand will decline about 10% and imports to rise by 30%.

“What is clear though, 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 at around zero next year (vs. -1.0% previously) and a trend growth of around 1% in the long-run.”

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