December 1, 2023
Russia admits it was on the brink of economic collapse after being hit by Western sanctions last year


  • Russia made a rare admission regarding the effectiveness of Western sanctions.

  • A Kremlin spokesman said the country was on the brink of collapse after unprecedented sanctions.

  • Despite continued pressure on its economy, Moscow now claims to have entered a new growth phase.

Russia admitted its economy was on the brink of collapse last year, but is now claiming it has beaten the sanctions and is on track for strong growth this year, despite economists’ estimates in light of continued sanctions on its economy. But it is.

“There was a threat of demolition, we really had to mobilize all resources and internal forces to prevent this collapse,” Kremlin spokesman Dmitry Peskov told Russia’s state news agency TASS on Sunday.

Peskov said the economic pressure was largely caused by sanctions following Russia’s invasion of Ukraine. The sanctions included stripping Russia of nearly $300 billion of foreign exchange reserves, locking some of its banks out of the vital SWIFT network and imposing sanctions and a price ceiling of $60 on Russian oil, one of the country’s top revenue sources.

But the country has successfully recovered and is now entering a phase of development, Peskov said. The Kremlin is now predicting that Russia could grow by 3% this year, higher than the 2.2% projected by the International Monetary Fund.

“Thanks to the practical and wise decisions of the country’s leadership, thanks to the huge work of the government, it became possible to reach a plateau, bring stability [the economic situation] And then, in a completely unexpected way, enter a growth trend,” Peskov said.

The statement is a rare acknowledgment of the sanctions’ effectiveness by officials in Russia, who have demonstrated defiance amid the West’s trade sanctions. In 2022, Putin described major Western measures such as a $60 oil price ceiling as “foolish” and vowed to retaliate by cutting oil production, which threatened to send prices rising.

Despite claims of strong economic growth in Russia, experts and observers have expressed doubt over the country’s economic future, as the country is planning a record-high military budget in 2024, raising signs of a fiscal crisis.

Crucial sectors such as Russia’s auto industry have almost completely collapsed over the past year. Meanwhile, inflation continues to rage, and central bankers are attempting to shore up the value of Russia’s ruble, which has declined over the past year.

Some experts have said that Russia may be headed for a dire future as its economy continues to deteriorate due to the war against Ukraine. Russia’s economic projections are also based on cherry-picked data, according to two Yale researchers who have proposed that the country’s economy could be teetering on the brink of collapse as the war consumes all available resources.

Read the original article on Business Insider


Leave a Reply

Your email address will not be published. Required fields are marked *