by Darya Korsunskaya
MOSCOW (Reuters) – If Western sanctions do not derail growth, the Russian economy is expected to grow by 5%-6% in 2022 Oleg Vyugin, a veteran of the Russian economy, told Reuters that a period of technological stagnation has come over the years.
Veukin says there is no catastrophe as the full sanctions imposed on Moscow due to the Ukraine conflict are only 30%-40% worked as Russia found a way to overcome the restrictions, but he warned of serious problems if Russia’s soaring export earnings fell.
“Without sanctions, Russia’s economy could have grown by 6 percent this year,” Vieukin, who served as deputy finance minister and central bank deputy governor before retiring from the Moscow Exchange this year, told Reuters said in an interview.
“In January-February, we will probably see a very strong takeoff. That turns out to be negative. Instead of a 5% increase, we’re down 4% , so the sanctions worked.”
Russian officials have gone out of their way to praise Russia’s economic prowess in the face of sanctions.
President Vladimir Putin expects gross domestic product to fall by just 2% this year, about 3% lower than the optimistic forecast, but lower than the World Bank’s April forecast. The expectations 11 have been greatly improved. 2% crash https://www.worldbank .org/en/news/press-release/2022/04/10/russian-invasion-to-shrink-ukraine-economy-by-45-percent-this-year.
Russia’s current account surplus – the difference in value between exports and imports – 11 more than tripled year-on-year in the first eight months to a record 183 $100 million as revenue surged while imports plunged due to sanctions, although the central bank expects it to contract in the second half.
Vyugin said the outlook is bleak and the conflict has no end in sight.
“Numbers can change, but the main result of sanctions is that Russia’s economic growth process has been interrupted for several years,” he said.
“The economy is very strongly supported, although export earnings are high,” he said. “If exports are severely restricted…that will do serious damage and we will see the next cycle of declining GDP.”
After the toughest sanctions in modern history on Russia , including cutting some of the top banks in the global financial system, Western countries and their allies are now preparing to limit Russia’s use of oil and gas.
Meanwhile, China is reaping the rewards of cheap energy supplies from Russia as Moscow looks east for alternative markets.
Vieugene is expected to feel some sanctions impact
Industry sources told Reuters last month that Aeroflot, including state-controlled Aeroflot, , has begun stripping jetliners for safety. Due to sanctions, they can no longer buy spare parts abroad.
“The world will move forward, but Russia will only use some second-rate technology and spend huge resources to rebuild what the world already has, but it cannot be imported, “Veugene said.
“If the situation does not change, the level of technological development in Russia will gradually decline.”