SANCTIONS WIPE OUT 15 YEARS OF ECONOMIC GROWTH IN RUSSIA

Thu 09 June 2022:

According to analysis on a Wednesday, sanctions imposed on Moscow for its invasion of Ukraine are reversing more than a decade of economic progress and three decades of integration with the West.

However, economists at the Institute for International Finance warn that the impact is a “moving target” because more sanctions are being imposed, and Russia may retaliate, particularly on energy.

The damage will make it more costly for Russian president Vladimir Putin to continue the war, but sanctions do not work like “flipping a switch,” IIF economist Elina Ribakova told reporters.

In its latest analysis, IIF forecasts Russia’s economy will contract by 15 percent this year and another three percent in 2023.

The “economic warfare” is “unraveling its economy,” and the report authors note that “some of the most meaningful consequences have yet to be felt.”

IIF Executive Vice President Clay Lowery said gauging whether the penalties imposed on Russia are effective depends on what governments are trying to achieve.

“If success is damaging the economy… then it’s definitely some impact,” and that is likely to increase, he told reporters.

But sanctions do not have “a great track record” of driving big policy shifts, he said.

Russia’s deputy PM says economy growing despite sanctions: Tass

Russia’s deputy prime minister says the country’s economy has been growing despite sanctions, Tass news reports.

“Thanks to the measures taken by the President of the Russian Federation, the government and the Bank of Russia, the economic war against our country did not go according to the plan of those who unleashed it,” Alexei Overchuk said at a conference on cooperation between Russia and Kazakhstan in the latter’s capital Nur-Sultan.

He said Russia’s economy grew by about 1.7 percent over the last four months and that, “in May, inflation practically stopped, the last week of May its level was 0 percent, last week we went into deflation,” Overchuk said.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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