Four months after the start of the invasion of Ukraine, Western sanctions have failed to relent the Russian president, who displays unfailing determination.
They wanted to “punish Russia. Assets were frozen, companies were punished. openness to commercial relations with the West.
Since the beginning of the "special operation", according to Russian terminology, in Ukraine on February 24, 2022, the United States and the European Union have multiplied punitive measures to isolate Russia by targeting its banking system, assets of its leaders or even its industry.
Acknowledging certain difficulties, in particular on the issue of inflation which reached a peak of 17.8% in May, Vladimir Putin asserts that the involvement of businesses and the authorities has today made it possible to "stabilize the financial situation and economy" of the country.
In the West, however, many observers believe that the worst is yet to come for Moscow.
The insolent rise of the ruble
Among the indicators of good economic health touted by Moscow is the impressive recovery of the Russian currency.
"We had been told of a collapse of the rouble. These forecasts were not realistic," mocked Vladimir Putin, in Saint Petersburg.
Evolution of the price of the ruble against the dollar between June 1, 2021 and June 21, 2022. © API XE Currency Data
At the beginning of March, a week after the start of the Russian invasion, the ruble had fallen to its historic low against the dollar and the euro - a consequence of the announcement of the first Western sanctions, in particular the freezing of the reserves of the Russian Central Bank held abroad.
In the event of a crisis, this money held in foreign currencies can be used by a country to boost the value of its currency, which the United States and Europe wanted to avoid in the case of Russia.
But the Russian Central Bank managed to counter this measure by massively raising its interest rates to 20% and imposing drastic capital controls on companies as well as on its citizens.
Since then, the price of the ruble has risen sharply, to the point of reaching, on Monday June 20, its highest level for almost seven years against the dollar on the Moscow Stock Exchange (55.44 rubles for one dollar).
An exchange rate with high symbolic value, but which nevertheless weighs on the Russian internal market according to the economist Julien Vercueil, vice-president of the National Institute of Oriental Languages and Civilizations (Inalco).
“It is undeniably a political advantage, because one of the fears of the Russian authorities, at the beginning of the war, was that a financial panic would trigger a process of inflationary runaway. economic agents in the rouble. This risk has been ruled out for the moment".
"On the other hand, the current levels of the ruble exchange rate are so high that they make products made in Russia uncompetitive in terms of price with their foreign competitors. This situation may complicate the policy of substitution to imports called for by Vladimir Putin".
The engine of oil
Another key factor explaining the rise of the rouble: the sale of hydrocarbons, which alone constitutes more than 60% of the country's exports.
Forced by sanctions to drastically reduce its import volumes, Russia continued to sell its oil and gas massively for export, which "contributed to the demand for rubles" on the international market, underlines Julien Vercueil.
Over the first hundred days of the war, between February 24 and June 3, Russia, driven by the rise in world prices, would have received 93 billion euros from the export of fossil fuels, according to a report by the independent institute Center for research on energy and clean Air (CREA), published in June.
As Ukraine pressures European countries to reduce their dependence on Moscow, the bloc has accounted for 61% of Russian exports, or about 57 billion euros, over this period, according to the study. period.
At the beginning of June, the EU adopted a sixth package of punitive measures against Moscow, including, this time, a gradual embargo on the purchases of crude oil and petroleum products from Russia, which should allow them to be reduced by 90% before 2023.
"This is an absolutely crucial measure because it is oil that allows Russia to hold out in this war," analyzes Philippe Waechter, director of economic research at Ostrum Asset Management, a specialist in financial assets.
"We talk a lot about Russian gas because Europe is very dependent on it, which gives Russia a significant power of nuisance. But oil brings in three times more money than gas for Russia and in this area the Europe has real leverage".
The European embargo against Russia, which alone accounts for 11% of world production of black gold, raises the threat of a new surge in the price.
But for the EU, it is above all an indispensable pressure tool against the Kremlin.
Threats to the industrial sector
If the banking and financial system has so far managed to cushion the shock of Western sanctions, some sectors are still hit hard by these measures.
This is particularly the case of the automobile, which recorded an abysmal drop of 78.5% in the sale of vehicles in April, compared to the same month last year.
A fall which is explained by the conjunction of the embargo on electronic components imposed by the West, the departure of several international companies such as Nissan, Mercedes-Benz, Volkswagen or Renault as well as the context of international shortage.
“While post-Covid demand is very strong, some Chinese factories are still operating at slow speed, such as in the Shanghai region, still impacted by the pandemic,” explains Philippe Waechter.
"For other Asian producers of electronic components such as South Korea, Taiwan or Japan, which have good relations with the West, Russia is far from being a priority market".
Faced with the same supply disruptions, the Russian aviation industry must also deal with the closure of airspace imposed by Europe, the United States, the United Kingdom and Canada.
Measures that have considerably slowed down activity and generated an explosion in ticket prices from Russia.
However, according to official figures for April, certain sectors of activity have been relatively spared from the sanctions, such as oil and mining extraction or manufacturing production, which recorded drops of 1.6 and 2.1% compared to April 2021. At the same time, the pharmaceutical and beverage industries recorded double-digit growth.
Medium and long term consequences
"For the moment, the official figures do not show a strong general drop in production" underlines Julien Vercueil.
"The initial impact has been more or less absorbed, despite a significant inflationary peak. But in the medium and long term, the decoupling of Russia from Western economies will have serious consequences in terms of the level of life and technological capabilities. The relationship with Asia can limit the damage, but in my opinion it will remain insufficient to fully offset them".
"Russia is cushioning the blow today but what about its ability to bounce back?"
asks Philippe Waechter.
"Because not only does this war monopolize state revenues, but it also deprives Russia of the transfer of technology provided by Western companies. This represents a considerable innovation deficit that Moscow will have a hard time making up for, unless significantly increase its dependence on China".
In May, the Russian Ministry of Economy indicated that it forecast a contraction of the economy of around 7.8% to 8.8% for the year 2022, before a return to growth in 2023 thanks to a "structural transformation" of the economy.
This would be the biggest annual fall in GDP in the last twenty years for the country.
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