War against Ukraine will have devastating consequences for Russia’s economy – IMF chief

War against Ukraine will have devastating consequences for Russia’s economy – IMF chief

IMF Managing Director Kristalina Georgieva has said that due to the war in Ukraine, the economic outlook for Russia beyond 2023 is “quite devastating.”

She stated this in an interview with CNN, Ukrinform reports.

“When you take our projections over a medium term, what they mean is Russia[’s economy] shrinking by at least 7%,” Georgieva said.

According to her, Russia’s economy would suffer over time as workers emigrated and access to technology was cut off, and as sanctions on its vast energy industry took a toll.

“This year what we reflect on is that Russia has managed to direct some of [its] oil sales beyond the markets of the European Union,” Georgieva said, referring to Russia’s rerouting crude shipments to China and India.

Read also: IMF mission kicks off discussions with Ukraine on new program

She believes that is not going to be a lasting impact for the Russian economy.

“We don’t see Russia in any way benefiting from what they have caused to Ukraine and to themselves,” the IMF chief said.

It is noted that following Europe’s recent import bans on seaborne Russian crude and oil products, Moscow’s finances have shown signs of strain. On Monday, the Russian government reported a budget deficit of 2.58 trillion rubles ($34 billion) for January and February, compared with a surplus of 415 billion ($5.5 billion) rubles in the same period in 2022. It said oil and gas revenues had fallen 46% year-over-year.

As reported, on February 5, an embargo on deliveries of seaborne Russian crude and oil products to the European Union and price restrictions on them, introduced by the EU and the Group of Seven countries, came into force.

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