Sunday, February 26, 2023

Why is the Russian economy holding up against Western sanctions?

France 24
Thu, 23 February 2023

Despite nine sets of sanctions imposed by the European Union, the Russian economy only experienced a small contraction of its GDP in 2022. The "resilience" of the Russian economy was hailed on Tuesday by President Vladimir Putin during his state of the nation address. However, certain Western observers and politicians point out blind spots in the official statistics provided by Moscow.

The Russian economy is resisting. Far from the "collapse" predicted by French Finance Minister Bruno Le Maire after the first waves of Western sanctions following the outbreak of the Russian invasion of Ukraine, Moscow's GDP contracted by only 2.1% in 2022, according to the Russian statistics service Rosstat. The Russian economy is even projected to grow by 0.3% in 2023, according to the International Monetary Fund (IMF).

"We have ensured the stability of the economic situation and protected our citizens," said Russian President Vladimir Putin on February 21 in his state of the nation address, adding that the West had failed to "destabilise Russian society".

The apparent resilience of the Russian economy is primarily due to the surge in oil and gas prices in 2022, which compensated for the drop in the volume of exports – a reduction of around 25% for gas.

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