Russia's economy is 'imploding' on export decline, economists claim

[Hydrogen]

Russia's economy is collapsing as exports to the sanctioned country plummet in the face of President Vladimir Putin's ongoing, unprovoked war in Ukraine, trade experts suggest.

The "economy is imploding. We forecast a GDP collapse of -30% by end-2022," Robin Brooks, the chief economist at the Institute of International Finance trade group, tweeted on Sunday.  

Brooks added that data compiled with help from Jonathan Pingle, an IIF researcher, indicated that exports from 20 countries to Russia were down 50% in April compared to the same time a year prior.

But monthly exports from Russia to other countries were up 64% in April compared to the same time a year prior, Brooks said on Monday, as oil and gas sales become a bigger part of Moscow's revenue.

Brooks said the country's account surpluses were "massive," which meant Russia was exporting far more than it was importing.

Russia stopped publishing its trade data after invading Ukraine in late February, so Brooks said the data was compiled using 20 of the country's top trading partners.

The Observatory of Economic Complexity said Russia's top trading partners include China and Germany.  

Since the invasion, European and Western countries have unveiled a slew of sanctions packages aimed at crippling Russia's economy.

Ukraine's government has routinely lobbied for harsher sanctions and led a push to try to redirect European Union countries away from Russian gas and oil — a main source of Moscow's federal revenue.


https://www.businessinsider.com/russian-economy-imploding-exports-under-pressure-ukraine-war-sanctions-2022-5

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They say russian imports are down 50%. While russian exports are up 64%. Therefore russia's GDP will suffer a collapse of 30% by the end of 2022.

As far as I know russia's food production has risen annually which has decreased demand for food imports. Russia's imports should fall naturally as it seeks to become more independent under sanctions. Russia has lived under economic sanctions for so many years I don't know what sanctions they propose to impose on them that have not already been done.

Russia exporting more than it imports may also represent the opposite of a trade deficit. Which could be a good arrangement depending on who you ask.

China and germany being named as russia's largest trading partners is another surprise considering natural gas and oil exports to the EU have typically been named as the route to crashing russia's economy.

[Welsh]

I think it's easy to see though, that these sanctions aren't just hurting Russia's economy. It's hurting the West's. The fact that rising living costs has happened off the back of these sanctions isn't any happy accident. Certainly, isn't solely down to the pandemic either. The thing is, the sanctions were not universally supported because a lot of those countries relied on importing Russia's gas, electric, and what have you.

So, those countries that significantly relied on them are now starting to feel the pinch, just as much as Russia if not more.

[Fortify]

They say russian imports are down 50%. While russian exports are up 64%. Therefore russia's GDP will suffer a collapse of 30% by the end of 2022.

As far as I know russia's food production has risen annually which has decreased demand for food imports. Russia's imports should fall naturally as it seeks to become more independent under sanctions. Russia has lived under economic sanctions for so many years I don't know what sanctions they propose to impose on them that have not already been done.

Russia exporting more than it imports may also represent the opposite of a trade deficit. Which could be a good arrangement depending on who you ask.

China and germany being named as russia's largest trading partners is another surprise considering natural gas and oil exports to the EU have typically been named as the route to crashing russia's economy.

Do you ever post anything besides Russian propaganda? It might be easy to think this is your full time paid job, putting on an image and trying to counteract the huge damage that Russia has done to the world by launching the biggest war in Europe since the end of World War 2. It's one thing to post occasional good news about different countries, but it is clear you have a tunnel vision mindset of "Post Russia Good, Post America Bad" when this is meant to be a forum about all sorts of economic related news.

Imports are down because nobody wants to sell to Russia anymore, not out of Russian choice, as Putin has caused untold suffering to many innocent people - Ukrainians and Russians alike. You are representing exports falsely as it is purely based on the increase FROM BELOW ZERO of the price of oil during Covid, yet again misleading what is really happening in this situation. Oil and gas are propping up this delusion but require no real skills beyond extraction. A free and civilized country engages in all sorts of other productive business pursuits which drive forward innovation.

[Z-tight]

It has been over two months Russia attacked Ukraine, sanctions followed, but the war is still two months old and counting, more sanctions are still being prepared i am sure, but honestly it does not look like it has had the type of impact the Eu and other countries thought it would have, Russia are still going on with the war, meaning they are still doing their economic business fine, maybe not as well as before, but they will be happy it is not just them that is suffering from their actions, but a lot of other countries. It is getting to that point that we must have to agree that sanctions can't end this war, or force Russia to stop, something more stringent has to be done.

[paxmao]

Another sanction approved today. Around 90% of the oil imports will be banned along the next few months from Russia into Europe. This is pretty much what brought Iran to the worst crisis in its recent history.

https://www.bbc.com/news/world-europe-61638860https://www.bbc.com/news/world-europe-61638860

The EU-wide ban will affect oil that arrives by sea - around two-thirds of imports - but not pipeline oil, following opposition from Hungary.

Poland and Germany have also pledged to end pipeline imports, meaning a total of 90% of Russian oil will be blocked.

European Council chief Charles Michel said the deal cut off a huge source of financing for the Russian war machine.

It is part of a sixth package of sanctions approved at a summit in Brussels, which all 27 member states have had to agree on.

It has been over two months Russia attacked Ukraine, sanctions followed, but the war is still two months old and counting, more sanctions are still being prepared i am sure, but honestly it does not look like it has had the type of impact the Eu and other countries thought it would have, Russia are still going on with the war, meaning they are still doing their economic business fine, maybe not as well as before, but they will be happy it is not just them that is suffering from their actions, but a lot of other countries. It is getting to that point that we must have to agree that sanctions can't end this war, or force Russia to stop, something more stringent has to be done.

This has only started.

[DrBeer]

They say russian imports are down 50%. While russian exports are up 64%. Therefore russia's GDP will suffer a collapse of 30% by the end of 2022.

As far as I know russia's food production has risen annually which has decreased demand for food imports. Russia's imports should fall naturally as it seeks to become more independent under sanctions. Russia has lived under economic sanctions for so many years I don't know what sanctions they propose to impose on them that have not already been done.

Russia exporting more than it imports may also represent the opposite of a trade deficit. Which could be a good arrangement depending on who you ask.

China and germany being named as russia's largest trading partners is another surprise considering natural gas and oil exports to the EU have typically been named as the route to crashing russia's economy.

The share of Russia in China's imports is approximately 2%. The share of China in Russian imports is 15%. Supplies from Russia to China are 70% oil, timber, coal, i.e. resources. At the same time, China imports these resources, at the prices that China wants, Russia does not dare to put any conditions on China.
Deliveries from China to Russia are from penny small things to the most high-tech systems. With the latter, however, a strong reduction in supplies is noticeable. Moreover, China did not even bother to warn or explain to Russia why it does this

Germany - the picture is identical. But Germany, on top of everything else, also initiates and launches sanctions against Russia

Really great partnership?

[avikz]

It's easier said than done! When the import of a country is down, it means two things -

1. The country is on the way of becoming independent
2. Their forex reserves are saved from being depleted faster

These are the indicators of a strong economy and not a weak one. Russia has been supplying around 14% of world's oil and gas requirement since long. So it is not very easy to make them bend down in the face of sanctions.

Most hilariously when the sanctions have been imposed by a country responsible for most number of wars in the history of humankind.

The world must end of dollar dominance which gives US an upper hand on almost everything.

[paxmao]

It's easier said than done! When the import of a country is down, it means two things -

1. The country is on the way of becoming independent
2. Their forex reserves are saved from being depleted faster

These are the indicators of a strong economy and not a weak one. Russia has been supplying around 14% of world's oil and gas requirement since long. So it is not very easy to make them bend down in the face of sanctions.

Most hilariously when the sanctions have been imposed by a country responsible for most number of wars in the history of humankind.

The world must end of dollar dominance which gives US an upper hand on almost everything.

Just a correction: The sanctions have been imposed by more than 20 countries. I do not debate your argument in the sense that US and some European nations have a bad track record in regards to peace.

[Ucy]

Of course, the wish of satan was to ruin the economy with the sanctions to starve them of fund, see them suffer and possibly protest against Putin/government (for regime change). Well, I'm convinced the opposite happened as the sanctions heavily backfired as was predicted before they began. The strength of Russia ruble is one of important proof to this, the increase in income for Russians, increase in wheat productions, etc.
I see the economy doing even better as Russia Influence expands globally.

[Wind_FURY]

I believe if Russia's economy fails more and more, there might be a Black Swan that's getting itself ready to emerge, and show itself to everyone's surprise/shock. Will it be World War III? I don't know. Naseem Taleb didn't use the expression Black Swan to define some that would predictable. If it's indeed to be a Black Swan, we will never know, nor will it be predicted. We can guess though.

vy can launch missiles at Ukraine.

The ports where submarines regularly docked in Sevastopol’s Southern Bay (Crimea) were empty on the afternoon of 13 May, Crimea Realities, a local media outlet, has claimed.

The Russian Black Sea Fleet consists of six submarines of the “Varshavianka” class: B-261 Novorossiysk, B-237 Rostov-na-Donu, B-262 Stary Oskol, B-265 Krasnodar, B-268 Veliky Novgorod, and B-271 Kolpino.

https://eurasiantimes.com/russian-submarines-are-now-in-the-black-sea-as-moscow-ukraine/

[davis196]

The western sanctions will hit the Russian economy in the long term, the Russian oil prices are 30% lower than the western oil prices.
Russia will have to sell more oil, gas and food to China, but the prices will be low, so the export revenue won't bring bigger profits for the Russian economy. The biggest negative effect of the sanctions will be the technological deterioration of the Russian economy, which will happen slowly, in a matter of several years.
Nobody is denying the fact, that the western sanctions will hit the western economies ae well. This is the side effect of globalization. The countries and their economies have become codependent on each other. The sanctions will end the state of codependency and create a more fragmented and divided global economy.

[countryfree]

It's worth adding that somehow, this was easy. What are Russian exports besides oil and gas? There's nothing Russian-made that I'd like to buy. Even Swedish or Polish vodka is better than the Russian one. Russia has a border with China, South Korea, countries which make plenty of desirable products, but Russia hasn't managed to make a single one.

If Russia had chosen to develop its industry instead of relying on raw materials, it would not be in the mess it's in.

[mia_houston]

The western sanctions will hit the Russian economy in the long term, the Russian oil prices are 30% lower than the western oil prices.
Russia will have to sell more oil, gas and food to China, but the prices will be low, so the export revenue won't bring bigger profits for the Russian economy. The biggest negative effect of the sanctions will be the technological deterioration of the Russian economy, which will happen slowly, in a matter of several years.
Nobody is denying the fact, that the western sanctions will hit the western economies ae well. This is the side effect of globalization. The countries and their economies have become codependent on each other. The sanctions will end the state of codependency and create a more fragmented and divided global economy.

I don't think Russian economy will be destroyed just because of western sanctions, maybe in other respects I can agree with you like sports, tourists or others, but from an economic point, I doubt that Russia will be destroyed, right now the EU is imposing sanctions on exports of gas, oil and minerals from Russia, but did you know that in fact it could backfire for EU countries?
Russia the third largest country as a producer of gas, oil and minerals for European countries and if they stopped shipping gas, oil and minerals wouldn't it make it difficult for the industry in the European continent to run?
I think as a country with oil and gas producers of course it is not difficult for Russia to find other importers besides China and I don't think China will be able to dictate to Russia to sell its gas and oil at cheap prices because it is clear that it has violated the mutual agreement later, even at the Union Summit Europe yesterday in Brussels, it seems that the cohesiveness of the European Union in carrying out sanctions against Russia has begun to crumble, even Hungary, Slovakia and the Czech Republic have begun to reject the sanctions because of their dependence on Russian oil and gas so far.

[Gozie51]

If Russia had chosen to develop its industry instead of relying on raw materials, it would not be in the mess it's in.

This war has actually exposed Russian economy as raw material based and this has not helped them this time. They are relying on China for buying of oil and gas and to get finished product from them. This is not healthy for an economy. The amount of dependency that Russia will witness after this war will further collapse the economy because when you can't produce 60% percentage of what you use to an extent then you will have to rely on other countries then inflation will set as there won't be foreign reserves.

[Ucy]

In a deceived world the economy is failing even when the President & Russia currency show otherwise.
I thought a characteristics of a healthy/strong economy is Strong currency or is this nolonger correct?

Anyway, I'm not surprised as alot used to believe that Russia was being defeated in the war against globalist in Ukraine.

[Lucius]

I think it's easy to see though, that these sanctions aren't just hurting Russia's economy. It's hurting the West's.

I have already written about how Russia is in a much better position because it was preparing for war and sanctions even before it started tearing Ukraine apart by attacking Crimea and supporting uprisings in Ukrainian regions along its western borders. It's like playing poker games where you know all the cards of your opponents and you can only lose money if you're a complete fool.

Even if sanctions work, no government in Russia, if we look through history, cared too much for the common man and he has always been a collateral victim for some major goals. In other words, Russia has enough cannon fodder to be able to fight for a very long time, whether 50 000 or 500 000 Russian soldiers die for Moscow doesn't matter anyway - most of the soldiers are from poor and rural parts of Russia anyway.

[pooya87]

Another way of looking at it is the EU exports to Russia was cut by 50% which is also visible as inflation and soaring prices all around EU.

This is pretty much what brought Iran to the worst crisis in its recent history.

What crisis? You should seriously stop reading propaganda specially from BBC

There has been inflation in Iran but not a crisis and the inflation also had very little to do with sanctions. It was because of an incompetent government printing money non-stop. Otherwise prices were mostly stable for the past year ever since the previous president's term ended and new one took office. That is despite the increasing sanctions against Iran.

IMF puts Iran's economy as 20th largest economy, Iran's GDP is the 17th biggest in the world. And both of these are excluding the billions of dollars of trade that Iran doesn't publicize due to sanctions!
On top of that as the country with the second largest gas reserves and large oil supplies with the soaring energy prices the country's revenue has increased significantly.

[palle11]

Anyway, I'm not surprised as alot used to believe that Russia was being defeated in the war against globalist in Ukraine.

The war actually took another twist. Now US is looking like coming out to show clear sympathy for Ukraine and giving out more dangerous weapon. Who knows what Russia has in store in terms of weapons, the latter days will determine how it will all happen as Putin clearly warned biden to stay off. Russia however has clearly shown that survival is possible despite severe sanctions.

[Rikafip]

I have already written about how Russia is in a much better position because it was preparing for war and sanctions even before it started tearing Ukraine apart by attacking Crimea and supporting uprisings in Ukrainian regions along its western borders. It's like playing poker games where you know all the cards of your opponents and you can only lose money if you're a complete fool.

I don't think that Russia is in much better position, it's just that their government doesn't really care how an average Russian citizen lives so maybe they are in better position as they don't have to worry about public opinion.

Even if sanctions work, no government in Russia, if we look through history, cared too much for the common man and he has always been a collateral victim for some major goals. In other words, Russia has enough cannon fodder to be able to fight for a very long time, whether 50 000 or 500 000 Russian soldiers die for Moscow doesn't matter anyway - most of the soldiers are from poor and rural parts of Russia anyway.

Sanctions won't work due simple reason that Putin doesn't give a fuck about his own people, and it's not like they can overthrown him on elections like in the west so in the end it's just a waste of time(and money). After all, we saw how sanctions worked in North Korea, Cuba etc. And it's not like Russians don't have a history of dictators making their life miserable so for them that's business as usual.

[arallmuus]

In a deceived world the economy is failing even when the President & Russia currency show otherwise.
I thought a characteristics of a healthy/strong economy is Strong currency or is this nolonger correct?

Those were because Russia was doing their countermeasure on all those sanctions, there is no way that they are going to sit still while wagering war on Ukraine doing nothing on their economy aspect. For now, it might not seems like it is taking any effect on their economy but there is no guarantee that their countermeasure will be effective for years as I expect that all those sanctions will last for atleast 2 years