Expensive gas keeps the Russian treasury well filled

Russia continues to benefit enormously from the rise in oil prices. Russia earned more than 100 billion euros in the first half of the year from the sale of oil and gas. That is 66 percent of the planned turnover from the sale of fossil raw materials for the whole of 2022.

Sanctions hardly affect exports
Until now, Western sanctions have mainly made it more difficult to import Western goods to Russia. However, the punitive measures are not considered particularly effective when it comes to the export of Russian commodities – mainly oil and gas. Due to the high prices on the raw materials markets, Russia has been able to make more profit despite lower export volumes.

How long will the path of Russia take?
Despite the economic cheer from the Kremlin, the question arises how long the course can be sustained. For example, the head of the Austrian Institute for Economic Research recently stated that the sanctions imposed by Western states will certainly have an effect.

While Austria’s economic growth has been reasonably balanced despite the crisis, Russia is likely to see a loss of eight to ten percent – ​​versus the eurozone it is expected to gain around two percent.

Strong ruble mainly supported by the state
Even the still positive exchange rate of the Russian ruble is not automatically an indication of the recovery of the Russian economy. While benefiting from high oil and natural gas prices, the currency’s exchange rate was recently supported by measures taken by the Kremlin and private individuals were not allowed to withdraw foreign currency.

In addition, Russia has recently failed to repay interest on foreign currency bonds, with the rating agency Moody’s even declaring Russia insolvent. Although the country has sufficient resources, Western sanctions prevent the payments from reaching Russian creditors.