Alone in the open: An e-scooter driver drives through the center of Moscow.
Image: AFP
Despite sanctions, Russia’s economy still appears to be quite stable: This is due to inventories, continued wages and state intervention. But the situation is likely to deteriorate significantly soon.
WAs for the future of the Russian economy, conflicting statements are coming from the country’s leadership. President Vladimir Putin is trying to downplay the consequences of the unprecedentedly tough economic sanctions over Russia’s attack on Ukraine. In mid-April, he announced that the West’s “blitzkrieg” sanctions had not worked, and that the financial system and industry were working stably, effectively and “rhythmically”.
On the other hand, the central bank is making forecasts that sound a lot bleaker – and more realistic. The governor of the central bank, Elwira Nabiullina, warns of a long-term loss of productivity and a severe recession with a drop in economic output of 8 to 10 percent this year. A recent report by the central bank states that mechanical engineering and the electronics industry in particular could be “paralyzed” by the failure of even a few foreign components. And the departure of Western companies, the analysts believe, could even surpass the effects of the sanctions with its negative consequences.