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Russia is facing the deepest economic contraction in nearly three decades as pressure from sanctions imposed by the U.S. and its allies mounts, Bloomberg reports, citing an internal forecast by the Finance Ministry.

Gross domestic product is likely to shrink as much as 12% this year, deeper than the 8% decline expected by the Economy Ministry, according to people familiar with the estimates who spoke on condition of anonymity to discuss internal deliberations.

The Finance Ministry issued a statement Tuesday saying the report of the forecast was inaccurate. “Preparation of official macroeconomic forecasts does not fall under the Finance Ministry’s authority,” it said, noting that it “expects that the measures taken by the government and the Bank of Russia will make it possible to ease to a large extent the negative consequences of sanctions and ensure stable economic development.”

A 12% contraction would put the economic pain on par with the turmoil seen in the early 1990s, when Russia’s Soviet-era economy lurched toward capitalism with a contraction not seen since wartime. 

“The main negatives are the oil embargo, the EU giving up Russian gas, along with more departures among foreign companies,” said Natalia Lavrova, chief economist at BCS Financial Group in Moscow. “All that will probably expand gradually, with a lot of negative carrying over in to 2023.”

Excluding those factors and based only on current sanctions, she forecasts a contraction of 10.8% in 2022 and about 5% in 2023.

The Bank of Russia said April 29 it expects a contraction between 8% and 10% this year. The International Monetary Fund forecast one of 8.5%, while a Bloomberg survey of economists found a median decline of 10.3%.