The Economist: Russia’s economy is getting stronger

British media reported that Europe is falling into recession, and Russia, despite sanctions, is getting out of it

The European economy is balancing with the last of its strength so as not to fall into a recession. The sanctions that the governments of countries have imposed on Russia have a negative impact on the EU countries themselves, while the domestic economy, having experienced a stressful recession, does not seem to be thinking of collapsing, but on the contrary, is returning to stability. The British edition of The Economist came to such conclusions after analyzing the current situation in the world.

The British edition of The Economist published an article that clearly shows the absurdity of the actions of the heads of EU countries. Journalists talked to experts and found out that Europe’s sanctions are more likely to hit its own stability than bring down the Russian economy.

“In the coming winter in Berlin or Paris, you may have to pay hundreds of euros for this, but in Moscow it costs a few rubles … In the economic war between Russia and the West, a critical moment has come. While Europe is teetering on the brink of a deep recession, the economic situation in Russia is improving,” writes The Economist.

The publication reports that Western sanctions have hit Russia’s long-term economic prospects. For example, according to forecasts, blocking access to foreign technologies and expertise has reduced the growth potential of the domestic economy by almost half. Nevertheless, Russia steadfastly survived this “blow”.

At the moment, the level of oil and gas production, the most important sector of the Russian economy, is about 3% lower than before the February events. In addition, Liam Peach of Capital Economics, a consulting firm, estimates that between 250,000 and 500,000 citizens fled the country in the first six months of the NWO. The news of the partial mobilization triggered a new, albeit less powerful, wave of bank runs by individuals. According to the publication, in September, the Russians cashed out from their accounts ruble deposits in the amount of $14 billion, which is about three times less than in February.

However, headline inflation has declined sharply from its earlier peak. According to journalists from The Economist, price pressure in the labor-intensive service sector continues to increase. But despite these difficulties, the recession in the Russian economy is probably over for now.

“Many people doubt official GDP data, but an idea of ​​economic activity can be obtained from a variety of sources. Goldman Sachs calculates a “current activity indicator” that gives an idea of ​​how things are in the economy from month to month. The data show that activity in Russia is significantly higher than in large European countries.

The consumer spending indicator calculated by Sberbank sank after the mobilization decree, but has since risen slightly again. Automotive production has also recovered from falling to almost zero a few months ago, suggesting that manufacturers have succeeded in replacing supplies from Western countries,” the media reported.

According to British journalists, the monthly import of goods to Russia in dollar terms is almost guaranteed to exceed the average level of last year. And in the IMF reports published on October 11, the April forecast of an 8.5% decline in Russia’s GDP this year was replaced by a new, more pleasant one. Now the Fund predicts a decline of only 3.4%.

“Such a decline seems to be a solvable problem. Moreover, economic data suggests that Russia will be able to continue fighting. At the end of September, the government presented the draft budget for 2023-2025. According to Elina Rybakova of the Institute of International Finance, the budget anticipates a significant increase in military and related spending in the coming years, especially in terms of internal security.