The sanctions already imposed against Russia are working. Thus, in 2022, a deterioration in key macroeconomic indicators was recorded: a fall in GDP, an increase in inflation and unemployment, and a reduction in investment. However, there is room for more restrictions. The implementation of this, ultimately, may lead to the fact that 2023 will become a turning point in the economic impact on the aggressor country.
This was reported by the press service of the Office of the President (OP). It is noted: sanctions pressure on Russia affects the further possibilities of waging war.
“Even in the official sources of the Russian Federation, the deterioration of key macroeconomic indicators in 2022 is recognized: a fall in GDP, an increase in inflation and unemployment, a reduction in investment. The effect of the sanctions had significant inertia and is now significantly affecting the Russian economy,” the report says.
The OP notes that the surplus of the current balance of payments of the Russian Federation is significantly reduced. Yes:
- for the period from the 2nd to the 4th quarter of 2022, the drop was 60%;
- data for December-January “testify to the strengthening of this dynamics.”
“In 2023, it will amount to $63 billion, [що значно менше] compared to $227 billion in 2022. With the prospect of a further fall,” the OP stressed.
In addition, they noted, there is a depreciation of the ruble and rising inflation, which is why Russians are getting poorer and losing access to quality goods and services. Also:
- every month the war withdraws from the Russian budget 8-9 billion dollars, which covered the National Welfare Fund (NWF);
- at this rate, the Kremlin will lose the entire liquid part of the NWF before the end of 2023.
“Revenues from oil and gas trade will fall by about 50% this year. And in the long term, the situation for the Russian oil and gas industry will look even more depressing: the irretrievable loss of the most stable and solvent markets, technological backwardness, the multiplier effect that will affect the tanker chain transportation, port services, pipe transport) – all this will only accelerate the collapse of the most significant “purse”, – the material says.
Sanctions can be strengthened
At the same time, it is noted that the sanctions regime is still far from exhausting its potential and requires constant updating and improvement. After all, “Russia still has sufficient resources to continue the war.”
There are several priority areas for new restrictions. These are, in particular:
- lowering the level of price limits for Russian energy resources – in particular, for oil;
- avoiding exceptions for state corporations directly involved in the aggression against Ukraine – such as Rosatom;
- Ensuring proper enforcement of sanctions already in place and strongly opposing their circumvention.
“The sanctions are working, but there are opportunities to strengthen them. 2023 could be a turning point in the economic impact on the aggressor country,” the OP concluded.
As GLOBAL HAPPENINGS reported, Russia is experiencing a shortage of dollars. Thus, according to the local Central Bank, in February, exporters sold only $7.8 billion of foreign exchange earnings on the Moscow Exchange, despite the fact that in January 2023, $10 billion were sold, and in December 2022, $15 billion.
Source: Obozrevatel
I am a journalist who writes about economics and business. I have worked in the news industry for over 5 years, most recently as an author at Global Happenings. My work has focused on covering the economy news, and I have written extensively on topics such as unemployment rates, housing prices, and the financial crisis. I am also an avid reader and have been known to write about books that interest me.
