The German Ministry of Economy emphasizes that the sanctions have a growing effect
Russia’s gross domestic product could fall by as much as 10% this year due to the mounting effect of the sanctions the country is being subjected to by the West for the invasion of Ukraine, according to data from Germany’s Federal Ministry of Economy. In addition, experts commissioned by the green Robert Habeck, head of the economy and German chancellor, predict that inflation in Russia will rise to 17% by 2022, according to an analysis the newspapers have access to. of the German Newsroom Network (RND).
“Russia’s economic prospects have deteriorated rapidly since the start of the war. The reason for this is mainly the sanctions that the European Union has imposed together with other allied countries”, the ministerial study indicates, which shows that, although the country is still increasingly high income from gas and oil reserves, he realizes that “with that money he can buy less and less on the world markets.”
As a result of the sanctions, Germany’s exports to Russia registered a 64.1% year-on-year decline in April last year. Imports by Russia have fallen by more than 30% so far, leaving the country facing a growing shortage of “intermediate products, high-tech products and central inputs in production processes,” the analysis by the German Ministry of Economy reveals.
The German experts based their research on data from the Federal Statistical Office, but also from the research institutes Consensus Economics and Oxford Economics. The analysis also shows that industrial production in Russia has already fallen by 8%, while private consumption has fallen by 11% due to the loss of purchasing power of the population. Due to the exclusion of Russian banks from the international payment system Swift and the increasing insecurity due to the possible imposition of new sanctions, investments with Russia as the final destination have already fallen by 34%.
Only the balance of payments surplus on the current account, ie exports minus imports, will increase from 7% to 14% of GDP. “Because with high energy revenues, there are almost no costs for imports,” says the analysis, highlighting that the increase in government income is faced with a 5% increase in government spending. “However, the surplus and high government spending cannot offset the negative effects in the described areas, so that the Russian PB drops significantly,” explains Habeck’s team of technicians.
The evaluation by the German Ministry of Economy of a representative study conducted by the Stolypin Economic Studies Institute in Moscow also highlights that the consequences of sanctions against the regime of Russian President Vladimir Putin are increasingly appreciated by the deteriorating climate business in the economy of Russia. While two in three entrepreneurs speak of a downturn in their business, 87% recognize that Western sanctions affect them directly.
Source: La Verdad
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