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Parliamentary question - P-001056/2022(ASW)Parliamentary question
P-001056/2022(ASW)

    Answer given by Mr Gentiloni on behalf of the European Commission

    On 16 May, the Commission will publish the Spring Economic Forecast, which will provide a detailed picture of the impact of the war on the European economy and will contain our assessment of Russian growth. As regards the Russian economy, private sector forecasters project a double-digit decline in GDP 2022, with inflation around 20%.

    The 70% figure refers to the share of assets of those commercial banks in the total Russian banking sector that were either placed under the prohibition to provide financing, whose assets were frozen, or which had to be cut off from the SWIFT network.

    Among these were large state-owned banks, including Gazprombank, Sberbank, VTB, VEB.RU and a number of other banks closely involved in supporting the actions of Russian government. In early May, Sberbank, the by far biggest bank, was excluded from SWIFT.

    However, the Russian banking system has not very strong international ties, so that the impact on the system is limited. The sanctions took early on a heavy toll on the domestic situation of Russian banks.

    Higher interest rates, capital restrictions and State guarantees resulted in the return of deposits after a short bank run. From a Russian perspective, the banking system has stabilised for the moment, enabling the CBR to cut interest rates twice in April. Nevertheless, financial conditions have tightened significantly after the invasion.

    The exclusion from SWIFT has a significant impact on Russian trade, mostly outside the energy sector. Coupled with export bans on high technology goods the exclusion makes it more complicated for Russian companies to get necessary spare parts for investment purposes.

    This will impede economic prospects. Sectors like the aviation sector but also petroleum engineering will be hit hard.

    Last updated: 23 May 2022
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