Russia will take “many years” to rebuild its economy if Western sanctions over Ukraine remain in place for a long time, the head of the audit chamber and former finance minister said Wednesday.
“If sanctions remain at the current level, it will take about two years of reconstruction, no less,” Alexei Kudrin said.
“Then we will have to rebuild for many years, because what we are talking about is replacing a whole series of imported products,” he was quoted by Russian news agencies as saying.
Kudrin also said that already soaring inflation could be as high as 20 per cent by the end of the year.
President Vladimir Putin says Russia’s economy has managed to weather the barrage of unprecedented sanctions imposed since he sent troops to Ukraine on 24 February.
But economists believe that the worst economic impact of the sanctions is still to come and expect Russia, which has relied heavily on imports of manufacturing equipment and consumer goods, to plunge into a deep recession.
“One of the main risks today is the contraction of the economy due to logistical restrictions on the one hand and the lack of liquidity on the other,” Deputy Prime Minister Andrei Belousov told Russia’s upper house of parliament, the Federation Council.
Belousov said the industry and trade sectors contracted 11 per cent due to the sanctions.
To support the economy, the state budget spending was increased 20 per cent year-on-year in the first quarter of this year, he said.
The Russian government has not released a growth forecast for 2022, but the World Bank expects an 11.2 per cent drop in GDP.