He said that expectations are bleak.. and there is no end in sight to the war with Ukraine
Expert: The Russian economy is not facing a catastrophe, but the West's sanctions are effective
What the war left behind needs many years to compensate.
AFP
President Vladimir Putin expects GDP to fall by only 2% this year.
EPA
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Veteran Russian economist, Oleg Fugin, told Reuters that the Russian economy was on its way to registering growth between 5% and 6% in 2022, before it was hampered by Western sanctions.
There is no catastrophe, Fugen noted, as the impact of comprehensive sanctions on Moscow over the conflict in Ukraine is only 30% to 40%, given that Russia has found ways to get around the restrictions, but he warned of serious problems should Russia's growing export revenue decline.
"If it weren't for the sanctions, the Russian economy would have grown by 6% this year," Vyugin, who served as deputy finance minister and deputy central bank governor during his career before retiring from the Moscow Stock Exchange this year, told Reuters in an interview.
“In the period from last January to February, one would have expected a very strong start.
But it turns out that there is a negative effect.
Instead of 5% growth, we have a 4% decline, so the sanctions are having an effect.”
low growth
Russian officials are doing their best to praise Russia's economic strength in the face of sanctions.
President Vladimir Putin expects gross domestic product to decline by only 2% this year, which is more optimistic than the Ministry of Economy's forecast of a decline of about 3%, but a significant improvement compared to the World Bank's forecast in April of a collapse of 11.2%.
Russia's current account surplus - the difference in value between exports and imports - more than tripled on an annual basis in the first eight months of 2022, to a record $183.1 billion, amid rising revenues, while sanctions dented imports. The central bank expected the surplus to shrink in the second half of the year.
Eugene said that the outlook is bleak and there is no end in sight to the war with Ukraine, adding, "The numbers can vary, but the main result of the sanctions is that the process of economic growth in Russia has been disrupted for several years."
And he added, "With export earnings rising, the economy is receiving a very strong support... If exports are severely restricted, it will cause serious damage, and we will see the next episode of lower GDP."
After imposing the toughest sanctions on Russia in recent history, including cutting off some of its major banks from the global financial system, Western countries and their allies are now preparing to limit the use of Russian oil and gas.
Meanwhile, China is reaping revenue from cheaper energy supplies from Russia, while Moscow in the east is looking for alternative markets.
Fusion expects to feel some of the impact of the sanctions in the recession, particularly in the technology sector, which relies heavily on imports.
"The world will progress, but Russia will only use second-rate technology and spend huge resources to reinvent what is already in the world, but cannot be imported," he said.
The world will advance, but Russia will only use second-rate technology and spend huge resources to reinvent what is already in the world, but cannot be imported.
The numbers can vary, but the main consequence of the sanctions is that the process of economic growth in Russia has been disrupted for several years.
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