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The Institute of International Finance (IIF) predicts that the latest round of U.S. and European economic sanctions could cause Russia’s economy to shrink sharply this year and, along with a devaluation of the Russian ruble, could trigger a run on banks and higher interest rates.

Elina Ribakova, IIF deputy chief economist, said on a conference call Monday that she expects Russia’s gross domestic product (GDP) to shrink by at least 10 percent and inflation to reach double digits as a result of the sanctions.

“It’s like the situation in the 1990s, when the (Russian) economy was completely disconnected from the global economy,” she said. She added that Russia will likely be forced to default on its roughly $60 billion in foreign debt as it loses access to foreign currency to service it.

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