DISINFO: Sanctions against Russia hurt Europe and help Russia
SUMMARY
Russia has long pointed out that the West lacks the courage to admit the failure of its sanctions against Russia. These sanctions also affected Europe with inflation, high prices, and losses of hundreds of billions of dollars, while the Russian economy continues to develop, and opens new destinations and logistical routes away from unfriendly countries.
RESPONSE
Recurring disinformation narrative by Russian officials about the impact of Western sanctions on Russia. The claims about Russia’s economic success contradict factual evidence.
Assessing the true state of the Russian economy is challenging. For over a year, both the Russian Central Bank and Rosstat—the national statistical agency—ceased publishing several key economic indicators. Additionally, the data they do publish has become less detailed than in the past, lacking specifics in areas such as banking, production, trade, and consumption.
However, we can still deduce that the war and western sanctions transformed the Russian economy in several ways. Importation and exportation schemes changed because of the international sanctions. Economic stakeholders changed, as many foreign companies left the country and the share of state-controlled companies now reaches 70%. Part of the skilled manpower emigrated to foreign countries to avoid draft or repression. The brain drain represents hundreds of thousands of skilled professionals. It is estimated that 1.3 million people under the age of 35 left the country in 2022. Additionally, foreign investments have nearly collapsed.
In April 2023, Russia's economy ministry revised its 2023 gross domestic product (GDP) forecast to 1.2% growth from a 0.8% contraction, but lowered its forecast for 2024, mirroring a wider trend that anticipates sluggish longer term prospects.
The International Monetary Fund raised in July its forecast for Russia's 2023 economic growth, but said the country may see a sharply wider budget deficit, and a smaller current account surplus this year. A lot of the economic activity is generated by the military industry and the state's procurement of weapons which is eventually discharged in Ukraine.
It said Russia's global isolation and lower energy revenues could harm its growth potential for years. Some analysts consider that the Russian resilience is nothing but a Potemkin façade, sustained not through genuine economic productivity but rather through shaking down the entire country for pennies to direct towards war.
Read an earlier detailed analysis of the Russian disinformation narratives about EU sanctions.
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