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| Caucasus/Russia/Central Asia |
| Long Russian recession |
| 2022-06-12 |
| [The Bell] Economic indicators for April released last week painted a surprisingly good picture: Russia’s economy appears to have shrugged off the initial effects of Western sanctions. But don’t be misled: the long-term effects of these sanctions are only starting to make themselves felt. Moreover, the EU last week announced a new round of sanctions: including an oil embargo that — as recently as a few months ago — was all but unthinkable. The government and the Central Bank are most concerned by the fall in consumer spending. However, the reduction in April (8.8 percent) was only a third of that seen at the peak of the coronavirus crisis in April 2020 (26.8 percent). The recent data is evidence that the current crisis will be very different from the pandemic: back then we saw a sharp fall and a gradual rebound; this time the fall will be steady and prolonged, according to Raiffaissenbank’s chief macro-analyst Stanislav Murashov. Consumer demand will likely continue to decline, firstly due to shortages arising from import problems, then due to a deteriorating labor market (although, for the moment, unemployment remains close to a record low of 4 percent). Economist Oleg Itskhoki told The Bell in March that we were seeing "an experiment on the Russian economy and the Russian population on a never-seen-before scale". He wasn’t wrong. Even now, economists insist that "specific" and "unprecedented" circumstances make it almost impossible to make forecasts. The only thing we can say with certainty is that things will continue to change unpredictably and that a recession is unlikely to last for less than two years (something even admitted by the Ministry of Economic Development). |
| Posted by:Matt |
| #1 While our economy tanks. |
| Posted by: Dale 2022-06-12 06:40 |