According to BNR internal economist Han de Jong, the whole situation mainly shows that it is difficult to say anything sensible about it. “The Russian economy is currently going through a huge transition,” he says. ‘Western companies are gone, sanctions have been imposed, western suppliers are no longer supplying, western markets are closed, so the Russians have to look for new suppliers and markets. While they are also fighting a war. This causes a huge economic blow, and economists can’t say much about it in advance.’
He points out that the Russian economy fared less badly in 2022 than initially feared, but that the problems have become visible in recent months. Especially with regard to public finances.
Income
The reason for this lies in the Russian government’s revenue, which has been disappointing. “This is mainly due to the drop in oil prices and lower gas exports,” continues De Jong. “This has to do with the sanctions, but they don’t want to supply us with gas anymore. At the same time, we see a huge increase in spending, and this is in turn due to the war. So it’s a mixture of war, deteriorating economic conditions and sanctions.’
Putin, meanwhile, is pressuring Russia’s central bank to lower interest rates. An interesting move, according to De Jong. “If you’re looking for signs that something is going down in an economy, this is one,” he says. “When a government starts pressuring an independent central bank to say or do something, you know they are under pressure too. So this is actually a bad sign for Russia.’