In the most detailed public statement on the outlook since the war started, the Bank of Russia’s Research Department warned in a report that “the depth of the contraction may be quite significant and exit trajectory drawn out in time” because the supply shocks triggered by sanctions are unlikely to fade quickly.

The central bank will release its updated forecasts after a rate-setting meeting on Apr. 29 and the Research Department’s outlooks don’t always coincide with those official ones. But the bank’s survey of analysts released Thursday found expectations of the contraction this year had worsened to 9.2 percent, while inflation is seen at 22 percent by the end of 2022.

The report’s outlook stands in contrast to the upbeat predictions from the Kremlin that Russia has withstood the worst of the sanctions and its economy will emerge stronger. It even forecasts the return of some phenomena last seen in the upheaval of the 1990s.

“The current recession is of a transformational, structural nature and will be bigger in scale and length in all scenarios” than the last one, triggered by COVID-19 lockdowns in 2020, the Research Department said. The pullout from Russia by hundreds of international companies is likely to have a a bigger impact than the direct sanctions, it said.

For the moment, the slowdown is showing up mainly in surveys of companies, as inventories build up before the Feb. 24 invasion haven’t yet been exhausted.

But that lull won’t last, the report said, as sanctions this year cut in to supply chains and Russian companies scramble to make up for components that are no longer available. Over time, machinery and equipment will wear out for lack of spare parts, reducing efficiency.

The business slowdown will flow into falling demand, job cuts and incomes, further weakening the economy, according to the report. Domestic production isn’t likely to surge to replace the missing output at this stage. Imports, especially of consumer goods, will shift to the “shuttle trade” seen in the 1990s, when Russians en masse flew to China, Turkey and other markets to bring back goods to sell on open markets.

“The small purchasing volumes and complicated logistics will make those imports more expensive and mean that it’s impossible for them to replace traditional suppliers,” the report said.

Inflation “will inevitably accelerate temporarily,” according to the report.

The worst of the contraction in output, incomes and jobs “is likely to happen roughly by the end of 2022,” it said.

After that, several years of “reverse industrialization” will begin as companies seek alternatives to the technologies cut off by sanctions. “The technological and economic efficiency of the equipment produced will be less than current ones,” the report said.

Ecological standards will fall as emissions and waste grow.

Ultimately, the adaptation process ends with “equilibrium and development at a new, less technologically advanced base,” according to the report. It’s not possible yet to say whether Russia’s potential growth rates – around 2 percent a year over the last decade – will rise or fall as a result, it said.