Bloomberg: Russia retained “shadow reserves” for $ 80 billion

Russia managed to keep about a third of the income received from exports of commodities abroad last year, writes Bloomberg. According to experts, only about $80 billion is invested in real estate or invested in foreign companies.

Analysts at Bloomberg Economics call these funds Russia’s “shadow reserves”, resulting from a record current account surplus in the country’s balance of payments – $227 billion. In total, Russia managed to accumulate the equivalent of about 5% of GDP in international assets in 2022, which is close to the average for the period of high oil prices in 2009-2013, the agency notes.

“Because of Europe’s delay in imposing sanctions on the Russian energy sector, the Kremlin has run one of the largest current account surpluses in its history. This de facto nullified the consequences of freezing the assets of the central bank,” said Maria Shagina, an economist at the International Institute for Strategic Studies.

Bloomberg Economics economist for Russia and Central and Eastern Europe Alexander Isakov believes that the accumulation of international assets was forced rather than deliberate. “Sanctions have pushed Russians to reduce imports, and commodity prices have boosted exports. Rather than encourage companies to build up foreign assets, the Russian government relaxed rules to help increase imports, which were needed to stabilize domestic inflation,” he added.

Earlier, the European Union announced the creation of a working group to develop a mechanism for the confiscation of frozen Russian assets to support the restoration of Ukraine. The confiscation may affect both the frozen assets of the Bank of Russia in the amount of $300 billion and the property of sanctioned individuals and legal entities.

According to Bloomberg, the European Union is currently froze €20.9 billion of assets of Russian citizens subject to sanctions. It is planned to freeze another €115 billion. To do this, the European authorities are trying to improve the mechanisms for searching for assets.

Read more about the potential confiscation of assets – in the material “Kommersant” “Russian assets want to be taken away and divided”.

Milena Kostereva