Russia Warship Sinks - Inflation at Highest Level Since 2015

How Much has Putin Broken Russia’s Economy?

EU energy ministers held emergency talks on Monday on purchasing Russian natural gas. Last week, Moscow cut off supplies to two member states, Poland and Bulgaria. They are the countries that refused to pay for gas in rubles. However, there is a growing fear that Germany, Europe’s economic power, could be further terminated.

At the same time, Europe worries about Ukraine due to the latest economic consequences because of the Russian war. What can be said about Russia itself? Oil and gas fund up to 50% of Russia’s budget. Is President Vladimir Putin killing his golden goose and destroying the Russian economy?

Vladimir rejected the company’s prospect of moving away from Europe, its best natural gas customer. But energy analyst SEB Bank says it would be an excruciating divorce for Russia.

As experts mention, you know, you might think this is a 25 to 30-year marriage. These are long-term contracts. It takes time to build infrastructure for gas supply. This is a considerable investment.

It will take eight years to double the Russian pipeline network in China, cost billions, and still cover less than half of lost sales in Europe. Then, there is the detrimental psychological effect that Russia cut off supplies to Poland and Bulgaria.

According to experts, Russia almost ruined its reputation. And there will not be many countries with them on these new long-term contracts. The reputation of unreliability may affect the long-term contracts for the supply of crude oil and petroleum products, which are Russia’s most significant exports. They are worth almost $200 billion a year.

Putin and the Russian Economy

Russia? The immediate financial value of the BlueBay Asset Management strategist in London was, of course, enormous. That would affect Russia by about $1.4 trillion.

“This is a huge amount and is about $8,000 per capita in Russia.”

This figure envisages halving the value of the Russian stock exchange and the freezing of assets controlled by the central bank and Russian oligarchs and the overall impact of Western sanctions on economic activity. The sanctions are likely to last as long as Putin is in power.

According to analysts, this increases investment, less growth, lower living standards, Perhaps brain drain, higher inflation, and overall undermines Russia’s productive capabilities. This is not just a Western perspective. The Central Bank of Russia surveyed more than 13,000 businesses, and the results were dire.

Almost every industry you use has a shortage; They find it difficult to export their products to the markets they were exporting. Europe is Russia’s most important trading partner – and it is also challenging to get them. The institute forecasts a 15% reduction in Russia’s GDP this year. Unemployment may rise, especially after more than 700 multinational companies left Russia and fired their employees.

Analysts estimate that their withdrawal will take several months, affecting the economic outlook. The departure of so many international companies will also deal a devastating blow to Russian industry. The automotive sector is also a possible victim of the war.

Conclusion

Russia created a pretty big domestic automobile industry in the last 30 years. Many productions are in Russia. All the major car manufacturers in the world are there. However, now they are heading to the exit.

So this is a fundamental problem in the long run. How is Russia changing Western investment and international experience in logistics and design?

Due to this economic disaster, which is developing all over Russia, support for Putin and his war may fluctuate. However, while public opinion polls should be viewed with scepticism, all other indications are that support for the Russian leader and what Putin calls a “special military operation” is vital in Ukraine. Nevertheless, the Russian people seem ready to withstand quite a lot of economic pain at this point.