Goldman Sachs cut its 2022 growth forecast to -7% from 2%. I thus visualize the GDP level:
figure 1: Russian GDP in billions Ch.2000 rubles (red), IMF January WEO forecast (red circle), GS forecast 3/3 (red square), 2/24 (salmon square), all on log scale . 2021Q4, 2022Q4 levels are calculated using growth rates. Source: OECD via FRED, IMF, Goldman Sachs and authors calculations.
If GS’ forecasts, including the sanctions impact and increased interest rates, prove correct, this recession will dwarf the 2014 recession.
Clearly, the cessation of hostilities could change the situation completely.However, it has been pointed out that economic sanctions tend to be “sticky” (listen to OMFIF Podcast hereAlso foot today), so unless everything is fully resolved in an unexpectedly friendly way, we may be in a world of severe economic sanctions for a while.
