The US and UK energy embargos will reduce Russian exports by just 0.6% of GDP, but adding in the EU’s plan to reduce Russian natural gas imports takes the total loss of export revenues closer to 2% of GDP. Coming alongside growing evidence of a more severe hit to the economy than we had first thought, we now think that Russian GDP will contract by 12% this year. And the risks are skewed towards an even larger fall, particularly if energy sanctions are broadened.
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