The Russian economy has begun to collapse
The Russian economy will shrink by 15 percent in 2022 and 3 percent in 2023.
Thus, the impact of Western sanctions, the departure of foreign companies from the country, the “flow of intelligence” and the collapse of exports will undermine the achievements of the last 15 years.
This is stated in the first report of the Institute of International Finance (IIF), published after the start of the war in Ukraine.
Deputy Chief Economist of the IIF Elina Rybakova Western sanctions have “completely destroyed investment over the past 30 years,” he said.
According to him, if Europe completely abandons Russia’s energy carriers, the economy will decline further in the medium term.
According to him, if Europe completely abandons Russia’s energy carriers, the economy will decline further in the medium term.
According to Rybakova, the recovery of the ruble after the initial collapse can not be considered as the strengthening of the Russian economy than expected.
If sanctions are strengthened…
Rybakova thinks that Russian banks have enough foreign exchange reserves. The reason is the complete collapse of imports. Russian companies and consumers cannot spend this currency on anything.
The economist believes that the impact of sanctions will increase over time, especially if the European Union significantly reduces oil and gas imports, although it will take months and possibly years.
According to the IIF, Russia’s capital accumulation will decrease by 25 percent, imports by 28 percent and exports by 25 percent in 2022.
Despite significant steps taken in late February, Russia has not yet reached the peak of its decline, the report said.
It is also noted that the imposition of additional sanctions on key areas of finance and Russian exports and imports could lead to catastrophic consequences for the Russian economy.
The report also notes that the countries that imposed sanctions for all this will also suffer significantly.