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Vladimir Putin and the impact of sanctions in Russia: "He joins the consensus of economists"

Russian President Vladimir Putin said on Wednesday (March 29th) that international sanctions targeting Moscow for its offensive in Ukraine "may" have negative consequences in the medium term on his country's economy, after having said in recent months that Russia was adapting to this new situation. © via REUTERS - SPUTNIK

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Russian President Vladimir Putin said on Wednesday (March 29th) that international sanctions targeting Moscow for its offensive in Ukraine "may" have negative consequences in the medium term on his country's economy, after having said in recent months that Russia was adapting to this new situation. Maintenance.

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Agathe Demarais is Director of Global Forecasting at the Economist Intelligence Unit (EIU), the independent research centre of The Economist magazine.

RFI: The Russian president talks about the medium-term consequences on his country's economy. What effects is he talking about and what is it really?

Agathe Demarais: The effects Vladimir Putin is talking about are actually well documented, but indeed he spent the previous year trying to deny them.

In fact, it seems difficult to deny the fact that Western sanctions will have a significant effect on the Russian economy in the medium and long term, depriving it of access to the technologies that Russia needs to extract and then export gas and oil, but also depriving Russia of access to Western technologies since it was Western companies that were the major suppliers of technology and innovation in Russia. equally.

One of the issues that will be difficult for the Russian government to resolve is the exodus of some of the most qualified workforce following the invasion of Ukraine. And finally, all this adds to great demographic challenges, low productivity growth and sluggish growth since well before the invasion of Ukraine began, and sanctions against Russia will only exacerbate this phenomenon.

► Also listen: How do sanctions affect Russia?

This is the first time that Vladimir Putin has publicly admitted that many sectors of activity in Russia are affected. Why is he doing it now?

This is a big question and it is indeed a surprise. We do not have the answer to this question, only he knows why he makes his statements. But it is in fact in line with the consensus of international economists who have been saying for quite some time that sanctions have an effect on the Russian economy and that this effect will be particularly important in the medium and long term.

This is probably part of the Russian strategy. That is to say, the Russian government has made economic disinformation a tool in its information war against Western countries and their sanctions. The idea is to say that sanctions do not work, since the Russian economy is doing very well, using statistics that are actually unreliable.

For example, when we take unemployment statistics, indeed unemployment in Russia is around 4% and has remained stable since the beginning of the war in Ukraine. But what you need to know is that Russian companies almost never lay off. When they encounter difficulties, they give unpaid leave to their employees, so there is no increase in unemployment but employees who are not paid, even if they are de facto unemployed.

This is not the first time that the Russian authorities have used statistics as a means of communication?

For Russians, statistics are an important tool for disinformation. After that, what is clear is that a number of economic sectors in Russia are in a very difficult situation. One example is the automotive sector, which is a perfect illustration of the situation. We saw a collapse in car production last year in Russia, by about 70%.

What for? Because there has been a collapse in demand from households who usually buy cars when they are optimistic. In addition, there is a lack of access to Western components to build cars, so those that are still built in Russia today are a little bit like a return to the Lada, they are without ABS and without airbag.

► Read also: Russia: some signs of economic deterioration

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