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Peter Davis

An writer at FOMOdrive

  • Aug 28, 2023
  • 2 min read

The Bank of Russia warned of a global crisis comparable to 2008

Options for the advancement of the Russian economy in the coming years have been released by the Central Bank.

What if there was a global crisis similar to 2008 and oil prices dropped to $30?

The Bank of Russia released "The main directions of the unified state monetary policy for 2024 and the period 2025 and 2026" on Friday via its website.

RBC writes that if the policy of extremely rapid rate increases by developed countries, which is currently being implemented, continues, it could lead to a recession in the global economy.

Amidst a waning trust in the financial system, a massive divestment of high-risk assets could trigger a domino effect, leading to a global crisis of a magnitude similar to the 2007-2008 crisis.

Due to the economic downturn in the US and the eurozone, global demand is expected to decrease significantly. Predictions suggest that oil prices will decrease steadily over the course of 2024 and reach $30 by 2025.

It is predicted that the Russian economy will remain in a state of decline for the next two years, with a decrease in GDP of 3-5% in 2024 and 2-3% in 2025. The recovery period is not expected to begin until 2026.

An alternative scenario that is more subdued would lead to an increase in the division of countries into blocs and the fragmentation of the world economy.

The sanctions pressure on the Russian economy will increase due to the decrease in global demand, causing the price of Urals oil to gradually decrease and reach $45 by 2025.

If exports are reduced further than the baseline scenario, Russia's GDP growth rate will be close to zero or even slightly lower in 2024. However, a 1% increase in GDP is possible in 2025.

Under the Central Bank's base scenario, the world economy is expected to progress along existing trends without any new shocks.

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