Suomen Pankki

BOFIT Forecast for Russia 2023‒2024


A year of war causes a major shift in Russian economic policy

The attack on Ukraine stopped Russian economic growth in its tracks, bringing in a fog of uncertainty. The invasion increased sanctions and caused many Western firms to leave Russia. As the dramatic economic contraction hit last year, the Russian government responded with radical shift in economic policy that was designed to blunt the harshest recessionary effects. At the end of February 2022, Russia began to quickly abandon the fiscal policies stressed prudence, balanced budgets and deficit reduction. Also abandoned was an exchange rate policy anchored by a freely convertible ruble. The primary aims of economic policy today are minimising the impacts of sanctions and decoupling from the West. The government has made clear that this economic transition cannot be left to market forces.

“A consequence of this war is that the role of the state in the Russian economy and Russian society has increased in many sectors. Large firms, in particular, are increasingly dependent on those in power. Economic policy is now shaped by wartime demands,” explains Laura Solanko, BOFIT’s senior advisor.

Wartime economy means lower growth

BOFIT now sees Russian GDP contracting by 2 % this year. Unless there are dramatic changes in the war or sanctions regime, we expect Russian economic growth next year to be close to zero. Over the medium term, Russia’s economic trends will depend above all on how the war ends.

The biggest risk factor in this forecast is the sustainability of Russia’s public-sector spending. We assume that budget deficits in coming years can be covered without significant difficulties. However, the domestic borrowing for public-sector financing cannot be increased without generating inflationary pressure or side-lining productive private investment.

Russia’s unprovoked invasion of Ukraine has led the Russian government to embrace economic changes that put it on a path towards an autarchic economy. While adjustment to this new normal has widely different implications at the sectoral and individual business level, this structural overhaul will lead to a Russian economy with lower productivity and lower long-term growth potential.

The full text of our latest forecast is posted on our website at

For further information:

Iikka Korhonen, research director,, +358 9 183 2272

Laura Solanko, senior advisor,, +358 9 183 2291

The latest BOFIT analyses of the Russian economy are available at our website




About Suomen Pankki

Suomen Pankki
Suomen Pankki
Snellmaninaukio, PL 160

09 1831

The Bank of Finland is the national monetary authority and central bank of Finland. At the same time, it is also a part of the Eurosystem, which is responsible for monetary policy and other central bank tasks in the euro area and administers use of the world’s second largest currency – the euro.

Subscribe to releases from Suomen Pankki

Subscribe to all the latest releases from Suomen Pankki by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from Suomen Pankki

Bank of Finland rules for counterparties and customers – Rules update 2o March 202320.3.2023 11:00:00 EET | News

On 24 February 2022 the Governing Council of the European Central Bank adopted Guideline on a new-generation Trans-European Automated Real-time Gross Settlement Express Transfer system (TARGET) and repealing Guideline 2013/47/EU (ECB/2012/27) (ECB/2022/8) and has amended these guidelines on 9 November 2022. The Bank of Finland has made corresponding additions and changes. The new rules for the new-generation TARGET can be found in the collection of rules governing the TARGET- Suomen Pankki system, see Bank of Finland rules for counterparties and customers. These rules will come into force on 2o March 2023.

Finlands Banks regler för motparter och kunder – regeluppdatering 20.3.202320.3.2023 11:00:00 EET | Uutinen

ECB-rådet godkände den 24 februari 2022 den uppdaterade riktlinjen om en ny version av det transeuropeiska automatiserade systemet för bruttoavveckling av betalningar i realtid (Target) och om upphävande av riktlinje 2013/47/EU (ECB/2012/27) (ECB/2022/8) och ändrat riktlinjen den 9 november 2022. Finlands Bank har gjort motsvarande tillägg och ändringar. De nya reglerna för TARGET-Suomen Pankki-systemet, se Finlands Banks regler för motparter och kunder. Dessa regler träder i kraft den 20 mars 2023.

Suomen Pankin säännöt vastapuolille ja asiakkaille – sääntöpäivitys 20.3.202320.3.2023 11:00:00 EET | Uutinen

EKP:n neuvosto on 24.2.2022 hyväksynyt päivitetyt suuntaviivat uuden sukupolven Euroopan laajuisesta automatisoidusta reaaliaikaisesta bruttomaksujärjestelmästä (TARGET) ja suuntaviivojen 2013/47/EU (EKP/2012/27) kumoamisesta (EKP/2022/8) sekä päivittänyt näitä suuntaviivoja 9.11.2022. Suomen Pankki on tehnyt vastaavat muutokset. Uudistetut TARGET- Suomen Pankki -osajärjestelmää koskevat säännöt korvaavat TARGET2- Suomen Pankki järjestelmän vanhat säännöt ks. Suomen Pankin säännöt vastapuolille ja asiakkaille. Uudet säännöt astuvat voimaan 20.3.2023.

Bank of Finland’s interim forecast: Finnish economy in hibernation17.3.2023 11:00:00 EET | Press release

The Finnish economy slipped into recession last autumn as a result of the energy crisis brought on by Russia’s war in Ukraine. The economy’s performance will continue to be very weak in 2023, according to the Bank of Finland’s interim forecast published today. It takes time for the full effects of uncommonly high inflation and the substantial rise in interest rates to be felt in the economy. The recession is expected to be short-lived and shallow, however. Turbulence in international financial markets is adding to economic uncertainty and could lead to weaker than expected growth in the Finnish economy. “Finland’s economy has held up so far, despite the difficulties, but the full effects of high inflation and elevated interest rates have not been seen yet. Risks in the global economy have also grown again in just the past few days,” says Bank of Finland Head of Forecasting Meri Obstbaum. The Finnish economy grew by 2.1% in 2022, thanks to a strong start to the year, but the war and the

Finlands Banks interimsprognos: ekonomin i vinterdvala17.3.2023 11:00:00 EET | Tiedote

Finland drabbades hösten 2022 av en recession på grund av den energikris som Rysslands anfallskrig orsakade. Enligt Finlands Banks interimsprognos, som ges ut i dag, är den ekonomiska tillväxten alltjämt mycket svag 2023. Konsekvenserna av den exceptionellt höga inflationen och de kraftigt stigande räntorna får genomslag i ekonomin med eftersläpning. Recessionen väntas dock bli kortvarig och mild. Turbulensen på den globala finansmarknaden ökar osäkerheten i ekonomin och kan leda till svagare ekonomisk tillväxt i Finland än väntat. "Finlands ekonomi har tills vidare hållit ut trots svårigheterna, men vi har ännu inte sett alla effekter av den snabba inflationen och ränteuppgången. Dessutom har riskerna i den globala ekonomin åter ökat under den allra senaste tiden, säger Finlands Banks prognoschef Meri Obstbaum. Under 2022 växte Finlands ekonomi med 2,1 % tack vare den starka utvecklingen under början av året, men kriget och energikrisen fick konjunkturen att vända nedåt. Enligt progno

In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.

Visit our pressroom