Current Western Sanctions Reducing Russian GDP by One to Four Percent; Tougher Ones Could Cut It 18 to 25 Percent, Bank of Finland Says

Paul Goble

            Staunton, May 13 – Western sanctions are reducing the Russian GDP by one percent because of limits of exports to that country and four percent by restrictions on purchases from it, the Bank of Finland says. If they were increased to a complete stop, that would hit the Russian economy by 18 percent and 25 percent respectively.

            Those figures show just how serious Western sanctions are now but also how much more serious they could become, suggesting that Moscow could face a situation far more dramatic than it currently does if the West chooses to tighten restrictions further (rbc.ru/economics/15/05/2022/627f8fd29a7947578b64ec78). 

            The new Bank of Finland study says that over time, Russia could reduce the impact of even the most dramatic sanctions but that the greater the sanctions, the longer it will take for Moscow either to develop domestic alternatives or find other countries willing to trade with it and thus make up for losses.