Yahoo Finance

Russia's economy is poised to plunge into recession, warns JPMorgan

Brian Sozzi · Anchor, Editor-at-Large
Mon, February 28, 2022, 7:03 AM

JPMorgan is among the first Wall Street banks to take a stab at estimating the economic fallout for Russia from fresh Western sanctions after its invasion of Ukraine.

And it isn't pretty.

"We tentatively assume that Russia’s economy will contract 20% quarter over quarter, saar [seasonal adjusted annualized rate], in 2Q, and for the year around 3.5%. But the margin of error for any such guesstimate is incredibly high at this point, and risks are skewed heavily to the downside. Moreover, we believe Russia’s growing political and economic isolation will curtail Russia’s growth potential in years to come and lower Russia’s trend growth to 1.0%, down from 1.75% previously," JPMorgan strategists warned in a new note on Monday.

The bank's strategy team added the Russia economy will likely enter recession.

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