Russian economy after six months of war.
It is already clear that 2022 will lead to greatest economic contraction since 1990s. Not even 2008-09 with 8% decline will be a match.
But this economic crisis is not like the other.
Thread 1/8
It is already clear that 2022 will lead to greatest economic contraction since 1990s. Not even 2008-09 with 8% decline will be a match.
But this economic crisis is not like the other.
Thread 1/8
War and sanctions lead to imports decline - so far it seems by the end of the year it would shrink by about a quarter.
Exports are on the decline as well:
Gas exports by 36%;
Steel and fertilisers by about 30%;
Coal by 29%;
Wheat by 27%;
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Exports are on the decline as well:
Gas exports by 36%;
Steel and fertilisers by about 30%;
Coal by 29%;
Wheat by 27%;
2/8
However, oil exports are so far on the rise. Embargo is planned for December so, we have EU countries stocking up.
With 3.41 million barrels/day Russia is making 20-35% more than last year with gas exports that shrank by 4x.
That gives Russia a trade surplus, Jan to Jul of
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With 3.41 million barrels/day Russia is making 20-35% more than last year with gas exports that shrank by 4x.
That gives Russia a trade surplus, Jan to Jul of
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USD192.4bn which is a 2.5 times (!) increase.
Nevertheless, it does not protect Russian budget from going deficit already in July. Even with oil prices this high ($100 and above). A trend that will keep on going indefinitely.
4/8
Nevertheless, it does not protect Russian budget from going deficit already in July. Even with oil prices this high ($100 and above). A trend that will keep on going indefinitely.
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What is crucial - in previous economic crises growing (recovering) exports revenues helped economy to recover. With sanctions imposed - it would not be the case anymore. If on top of that we would see a global recession would come - trade surplus is bound to disappear.
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The parallel import that Russia is currently relying is adding about 20%-25% of costs to import the same good and it is likely the price will only increase with time.
So far, Central Bank tough monetary policy is keep things together but at the same time it leads to curious
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So far, Central Bank tough monetary policy is keep things together but at the same time it leads to curious
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developments (coupled with other factors as well) like
Lada Vesta costing about 2.4 to 3 million rubles or $40k-50$k while only in January it was 1.-1.1 million rubles or $14k-$16k.
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Lada Vesta costing about 2.4 to 3 million rubles or $40k-50$k while only in January it was 1.-1.1 million rubles or $14k-$16k.
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These and other factors indicate that Russian economy is heading towards a full collapse in 2024-2025 says @Vladi_Moscou in his new @RiddleRussia piece
ridl.io/russian-econom…
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ridl.io/russian-econom…
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