By Andrea Shalal

WASHINGTON, (Reuters) – Russia’s economy won’t recover from the sweeping sanctions imposed in Western countries over the war in Ukraine. The sanctions could be extended to energy exports and cause further harm, according to the International Monetary Fund’s new chief economist.

Pierre-Olivier Gourinchas was a January member of the fund. The U.S. sanctions and Western bans on exports and trade had set the Russian economy “very differently,” making it unlikely that there would be a rebound after economic shocks.

Gourinchas said in an interview that “as long as these sanctions exist – and they might be in place for a fairly long time – then the Russian economic growth trajectory is going to change.”

He stated that “We view this as…something that is really hurting Russia’s economy going forward, and could even further hurt it if the sanctions get escalated.” “The shock to the Russian economy has been very severe… so we aren’t expecting a rebound from this point.”

On Tuesday, the IMF lowered its global economic growth forecast by almost a whole percentage point. It cited Russia’s conflict in Ukraine and warned that inflation is now a “clear, present danger” to many countries.

According to the report, Russia’s gross national product is expected to shrink by 8.5% in 2014 and 2.3% next year.

Gourinchas said earlier at a news conference that Western sanctions on Russian energy exports could lead to Russia’s economic output dropping by 17% in 2023.

He stated that Russia’s economy could be effectively “thrown into anarchy” if sanctions were extended to energy and left it with few trading partners.

He said that while countries such as India and China haven’t joined Western sanctions against Russia, secondary sanctions were still having an adverse effect on trade relations with Russia.

He said that “we’re witnessing that, for example, with many Chinese companies – there’s fear of second-rung sanction, that if your business is with sanctioned entities then you could yourself be subject to sanctions.”

India and China would have to make hard choices if sanctions continue. They need to continue trading with the rest the world.

He stated that it was vital to continue being part of the (global supply) chains moving forward. Many countries will have to think about where they want to go in the new world that’s emerging.

He stated that at the moment, many countries do not “make the choice to move to the other side” as he does not anticipate them to.

Gourinchas stated that a rise in Russian ruble value would not mask general indicators in the economy such as higher inflation.

However, the Russian monetary authorities proved to be able use capital controls as well as higher interest rates in order to avoid bank failures or bank run-offs.

He said that there are no signs yet of unrest in Russia due to rising food and energy prices. However, the IMF warned of increased unrest in countries around the globe where these prices have risen.