“From the first sanctions, my mother said: ‘Above all, stock up on medicine’. says Yulia, a Moscow engineer, who prefers to remain anonymous. We quickly understood that she was right: everything that comes from abroad will soon be missing. » To protect her savings against the collapse of the rouble, the 31-year-old rushed to the store to buy a handful of jewelry and a computer. “It will always be worth something. » His brother Ivan turned to cryptocurrency. “But I don’t trust myself. If our economy collapses, it is not with virtual pennies that we will buy bread. »
Targeted by a series of unprecedented economic sanctions in response to the invasion of Ukraine, partly excluded from the global financial system, Russia is on the verge of plunging into a deep recession. “It is very difficult to assess the extent of this, as it will depend on the evolution of the war and the possible introduction of new sanctions, but it is estimated that the gross domestic product could plunge by 5% to 10% This year “, explains Lysu Paez Cortez, economist specializing in the country at Natixis. With the same caution, the Capital Economics teams are counting on a shock comparable to the 1998 recession (-5.3%), while those at JPMorgan believe that the plunge could go up to 35% in the second quarter, and 7 % over the whole of 2022.
“Payment default and social crisis”
Since 2014 and the annexation of Crimea, Vladimir Putin has strengthened his country’s economic independence by strengthening certain industrial sectors and reducing the exposure of central bank reserves (equivalent to 630 billion dollars, or 580 billion euros). euros) to the greenback. But Moscow will hardly be able to sustain itself for long, because Western sanctions prevent the central bank from accessing a large part of the reserves held in foreign currencies – nearly 400 billion dollars. “In a few months, even weeks, Russia could plunge in default of payment and a social crisis comparable to that experienced by Argentina in 2001″, judge Ludovic Subran, chief economist at Allianz.
The economy will be affected through different channels. The exclusion of seven Russian banks from the Swift financial network, first, is the equivalent of a huge handful of sand thrown into the mechanics of the country’s trade, complicating the payment of imports. “Transaction costs will explode and cause dysfunctions in the economy”, adds Ludovic Subran. This could result in shortages, especially since many Western brands – Ikea, Apple, Dell, Honda, Netflix, H&M… – have announced that they are suspending their activities in Russia.
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