The head of Russia’s central bank on Monday warned that the consequences of Western sanctions are just beginning to be felt, and the mayor of Moscow warned that 200,000 jobs are at risk in the Russian capital alone. , the admissions clearly undermined President Vladimir Putin’s view that the sanctions failed to destabilize the Russian economy.
Various assessments suggest that the impact of Western sanctions on Russia’s invasion of Ukraine – and its potential to undermine Mr. Putin’s ability to stay in power – remains uncertain almost two months later. fight.
While experts say Russia faces an economic ticking time bomb as its imports and component inventories dry up, Putin is using the fact that the Russian economy is not yet fully operational. collapsed to reinforce the view that sanctions would not be able to stop him.
Western sanctions, Putin said Monday during a teleconference with senior officials, are intended to “rapidly undermine the economic and financial situation in our country.” , causing panic in the market, the collapse of the banking system, and a large-scale shortage of goods in stores. ”
But we can say with confidence that this policy towards Russia has failed. “The economic blitz has failed.”
Mr. Putin partially addressed a domestic audience, seeking to reassure Russians who are suffering from fears of cash shortages, a failing stock market and the closure of Western retailers. as famous as Ikea.
Putin has said he is ready to increase government spending to stimulate the economy, a sign that continued revenue from energy exports is giving the Kremlin flexibility in easing sanctions. punish.
Harsh capital controls imposed by the central bank helped the ruble recover from its collapse in the days following the invasion. And there have been few reports of major layoffs or widespread food shortages in grocery stores.
But contrary to Mr. Putin’s optimism, two senior officials on Monday warned that real economic pain is yet to come. Mayor Sergei S. Sobyanin of Moscow announced a $40 million program to help people laid off by foreign companies find temporary and new jobs; According to his office estimates, he said, “about 200,000 people are at risk of losing their jobs” in this city of 13 million people.
And in one appear in the House of Representatives, Elvia Nabiullina, President of the Central Bank of Russia, gave a more far-reaching, negative assessment. She told lawmakers that while the impact of the sanctions will be primarily on financial markets at first, they will now “start increasingly affecting real sectors of the economy. “
Russo-Ukrainian War: Main developments
For example, she says, “practically every product” made in Russia relies on imported components. Factories may still have stock in stock. But because of new Western export restrictions, Russian companies will be forced to change their supply chains or start producing their own components.
“At the moment, perhaps this issue is not being felt strongly, as there are still reserves in the economy, but we see that sanctions are being tightened almost on a daily basis,” she said. “. “But the length of time the economy can live on reserves is finite.”
Ms. Nabiullina, an internationally respected central banker, who reported try to resign In the postwar days, about half of the central bank’s $600 billion in foreign currency and gold reserves remained frozen because of sanctions. The reserves the bank still controls, mostly gold and yuan, – of little use in trying to stabilize the ruble – have forced the bank to resort to capital controls such as capital controls, she said. limit the amount of foreign currency that can be taken out of the country.
During a teleconference later that day with Nabiullina and several other officials, Putin acknowledged that the Russian economy had faced a number of problems, including inflation. He said he has directed state employee pensions and salaries – part of Mr Putin’s political base – to be adjusted for inflation and said he favors greater government spending to stimulate the economy. economic.
The budget should actively support the economy, saturate the economy with financial resources and maintain its liquidity. “There are opportunities for this. Of course, we need to act with caution.”
