Ukraine sanctions – Update as of 25 April 2022
Since our last update on 28 March 2022, the US, EU, and the UK have announced additional sanctions against Russia. Norway has, as expected, aligned its sanctions against Russia with those of the EU.
We view it as likely that Western countries will continue to escalate sanctions against Russia as long as the war in Ukraine continues. For that reason, our previously communicated position that any adaption to current sanctions entails high risk is strengthened.
Furthermore, recent analysis shows that the Russian sanctions have a devastating impact on the Russian economy. As of now, roughly 60% of Russian foreign currency reserves are frozen abroad, and Russia is heading for the deepest recession since the collapse of the Soviet Union. Estimates for Russia’s GDP in 2022 range from -8.5% to -15%. In addition, sanctions have triggered rapid inflation, with average consumer prices up 8.67% since the invasion. Longer-term, expert predictions suggest a continuing economic hit, with GDP growth depressed as the country is cut off from Western technology and critical inputs.