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Russian economy falters as sanctions bite: report

10.08.2022 23:15
While Western sanctions have not succeeded in forcing the Kremlin to stop its war in Ukraine, they have hurt the Russian economy more profoundly than previously thought, a Polish newspaper has reported.
Western sanctions on Russia are starting to bite, according to a Polish newspaper.
Western sanctions on Russia are starting to bite, according to a Polish newspaper.Image by Lorenzo Cafaro from Pixabay

The Kremlin’s official statistics are becoming "ever more scant," but "the signs of Russia's sanctions-induced economic crisis cannot be hidden," the Rzeczpospolita daily newspaper said on Wednesday.

In its latest analysis of the impact of sanctions on the Russian economy, Rzeczpospolita reported that "there is no doubt that the Russian economy hasn’t suffered an immediate collapse, but it is equally obvious that it has incurred damage."

The paper pointed out that although “the rouble has strengthened by 23 percent against the dollar this year,” this was caused by “administrative controls on currency exchange and falling imports, while energy exports remained relatively high in the past few months,” Polish state news agency PAP reported. 

Falling car sales

Meanwhile, those who argue that the sanctions have been effective “point to dwindling vehicle and motorcycle sales, for instance,” Rzeczpospolita said. 

It reported that Russia’s car and motorcycle sales plummeted from 114,400 in February to 27,800 in June  

Vehicle output drops

At the same time, Russia’s vehicle output fell by a whopping 66 percent in May, compared with a year earlier, while the production of household appliances dropped by 60 percent in the same period, according to Rzeczpospolita.

Meanwhile, retail sales in Russia fell by 10.1 percent year-on-year in May and by 9.6 percent in June, according to government figures, Rzeczpospolita reported.

It added that Russia’s biggest lender Sberbank put the figure at around 20 percent.

Russian gov't 'ceased to publish some economic data'

The validity of official statistics has been called into question, however, as “the Russian government has ceased to publish some economic data in recent months, while the figures that are published contain anomalies, according to analysts,” Rzeczpospolita said. 

The consumer price index stood at 15.9 percent in June, but base inflation, excluding the prices of food, fuel and energy, totalled 19.2 percent, Rzeczpospolita reported, citing experts from America's Yale School of Management.

Meanwhile, sectors that rely on international supply chains faced an inflation rate of between 40 percent and 60 percent, according to the Polish paper.

Wednesday was day 168 of the Russian invasion of Ukraine.


Source: PAP, rp.pl