Heli Simola, Senior Economist at the Bank of Finland Institute for Economies in Transition (BOFIT), evaluated the impact of export and import sanctions on Russia’s GDP in the short run. This has been reported RBC.
According to him, sanctions restricting the import of goods to Russia can reduce the country’s GDP by 4-18% and restrictions on exports by 1-25%.
The economist believes that trade restrictions will have a significant negative impact if Russia cannot find alternative markets for the sale of goods.
Under the current sanctions, the gross value added in the Russian economy could drop by about 4%.
If the developed countries completely stop deliveries to Russia, the decrease in total value added will reach 10%.
In case of a complete cessation of imports to the Russian Federation, GDP will decrease by 18%.
Simola added that this analysis is for illustrative purposes only and leaves out a few important caveats.
Formerly Bloomberg knowledgeableHe said that Russia’s Ministry of Finance expects a 12% decline in GDP in 2022, which will be the biggest decline in the country’s economy in the last 30 years due to the increasing sanctions by Western countries against Russia. Later at the Ministry of Finance refuted this information.