According to the International Monetary Fund, Russia’s gross domestic product, GDP, is shrinking by 3.4 percent this year. A recession that is deeper than the pandemic, but milder than the financial crisis. The reason? This year’s high prices for oil and gas have increased the country’s income.
While the EU bans Russian oil, more and more is sold to China and India. In addition, the country sells more aluminium, nickel and diamonds to the EU and the US than in previous years.
According to Torbjörn Becker, Russia’s economic resilience has perhaps mainly surprised by how it handled the price increases for oil and gas.
– Russia has gone through several economic crises in the last 20 years, so they have learned to deal with macroeconomic, big problems. They benefit from it in this situation, he says.
Price ceiling on oil – possible sanction
According to Becker, relatively few, smart reforms are required to cope with the type of sanctions that Russia has suffered. Among other things, Russia’s restrictions on bank withdrawals at the beginning of the invasion proved particularly effective.
How effective are the West’s sanctions against Russia?
– The problem is that we pay so much for Russian exports. Different price caps on oil exports from Russia are now being discussed, it would directly reduce the income from Russian exports, he says in SVT Aktuellt.
Putin claims: Russian economy is flexible
The President of Russia, Vladimir Putin, himself states that the economic success is due to being flexible. According to Becker, it does not correspond to reality.
– Oil, gas and minerals are still the main sources of income. Without these, Russia can cope quite easily, he explains.
Is there room for more sanctions?
– Yes, there is. We can impose sanctions that target more exports from Russia, but also our own exports that target Russia.