JPMorgan: Shock to Russian GDP Will Be Akin to 1998 Crisis

JPMorgan said on Thursday it expected Russia's economy to contract 35% in the second quarter and 7% in 2022 with the economy suffering an economic output decline comparable to the 1998 crisis.

“A peak-to trough decline in Russian GDP is now expected at around 12%, comparable to 1998 (~10%) and 2008 (~11%) crises and COVID-19 shock (~9%),” Anatoliy Shal at JPMorgan said in a note to clients.

JPMorgan expected exports to decline around 13% this year, domestic demand about 10% and imports by around 30%.

“What is clear though, is that Russias growing economic and political isolation will lead to lower growth in the long-run,” Shal added.

“We expect Russias growth at around zero next year (vs. -1.0% previously) and a trend growth of around 1% in the long-run.”

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