The WTO warned about the negative impact of sanctions against Russia on other economies

The sanctions imposed against Russia will have a negative impact on most economies, it says in the World Trade Organization (WTO) 2023 report.

Even bilateral trade tensions can reduce economic growth in highly integrated economies, the report said. As an example, experts cited tensions between Beijing and Washington, which led to a decrease of 0.3% in China’s GDP and 0.1% in US GDP.

“Similarly, the economic sanctions imposed against the Russian Federation in response to [спецоперацию] in Ukraine are forecast to have a negative impact on most economies, with the Russian Federation experiencing the largest drop in real GDP,” the WTO says.

Geopolitical tensions usually affect only a few economies, which leads to a breakdown in trade relations, the organization clarified. At the same time, other economies may remain neutral or join one side. According to the WTO, the separation could benefit some neutral countries. For example, as was the case in Vietnam, where from 2017 to 2020 there was a 40% increase in goods exports amid tensions between China and the United States.

The WTO emphasizes that most developing countries are vulnerable to economic decoupling. According to forecasts, by 2050 they may lose 6.5% of GDP compared to 2019. At the same time, developed countries from 2020 to 2050 may lose about 3% of GDP.

Russian President Vladimir Putin previously said that the growth rate of the Russian economy this year has accelerated from month to month, so we can assume that in 2023 growth will completely cover last year’s decline. Back in December 2022, Deputy Prime Minister Andrei Belousov expected a decline in GDP in 2023 of within 1%, but already in April 2023, the Ministry of Economic Development predicted economic growth of 1.2%. In July, Prime Minister Mikhail Mishustin statedthat the country’s GDP could grow by more than 2% if “there are no force majeure circumstances.”