Sanctions work: Russian economy weakens, Ukrainian economy grows – Ministry of Economy

Russia’s economy has begun to show serious signs of weakening – sanctions are working, inflation is rising, and oil revenues are falling. Despite larger volumes of resources, Moscow faces deep financial problems, while the Ukrainian economy, on the contrary, is gradually recovering and growing. This was stated during the conference “Fair Play: How to Make Sanctions Work” by the First Deputy Minister of Economy of Ukraine Oleksii Sobolev, as reported by the UNN correspondent.

DetailsThe sanctions policy against Russia is yielding a tangible effect, which is visible at the macroeconomic level. As the expert noted, the GDP figures of the Russian Federation indicate a decline in the economy since the beginning of the full-scale war.

Sanctions are working macroeconomically. If you look at Russia’s GDP in the first quarter, compared to the fourth quarter of last year, it (the economy. — ed.) fell. This happened for the first time since the invasion, it shrunk by 6%

In parallel with this, the Ukrainian economy, according to him, shows positive dynamics, despite the war. Ukraine’s GDP continues to grow, especially after the stabilization of the situation in the second half of last year.

While the Ukrainian economy grew… and the rate of growth this year will slightly increase…

As Sobolev emphasizes, Russian resources are being depleted. Fuel reserves in energy storages have been reduced by 70%, the budget deficit already reaches 90% of the annual plan, and inflation, even according to official estimates, exceeds 20%.

Similarly, the inflation that Russia officially states is already over 50%. While the official rate set by their Central Bank is 20%… even official inflation of 20% causes social tension

Among the most effective instruments of influence, experts name energy sanctions, which have seriously reduced the profits of the Russian Federation.

Russia has not received about 90 billion in oil export revenues. This is also related to the oil price cap, and very effective sanctions on tankers

Out of approximately 700 tankers in the Russian fleet, sanctions have already been imposed on 400-500 units. This complicates logistics, increases costs, and reduces budget revenues.

This complicates Russia’s logistics, forces them to receive less money… and this reduces budget revenues. The CBR recorded a loss for the first time in many years, losing more than half of its profit. Some companies have stopped paying dividends

In the future, according to the expert, it is worth putting even more pressure on Russia’s energy sector, and also expanding restrictions on key economic sectors: metallurgy, chemistry, and the nuclear industry.

In conclusion, the expert noted that the Russian Federation’s economy is already showing signs of exhaustion, and this trend will only intensify.

We see that the economy has indeed begun to weaken and it has already started to show the first signs of real weakness – and you will see them this year as well… thanks to this work

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