MOSCOW (AP) — The head of Russia’s Central Bank said Friday that the country’s economy will contract by about 3% this year, a sharp turnaround from its growth in 2021, the year before sanctions and company pullouts in the wake of the conflict in Ukraine.

Central Bank governor Elvira Nabiullina said following a bank board meeting that inflationary pressure remains elevated, citing “worsening trade conditions” as one factor. She said annualized inflation as of December was 12.7%.

Russia’s gross domestic product rose by about 4.8% last year.

A wide array of foreign companies pulled out of Russia or scaled down their activities in the country after Russia sent troops into Ukraine in late February.

The European Union imposed a price cap this month on Russian oil, one of the country’s key exports.

Nabiullina said the effect of the price cap would be analyzed more thoroughly at the bank’s February meeting.