Take, for example, a “current-activity indicator” published by Goldman Sachs, a bank, a real-time measure of economic growth (see chart 1). In May 2022 Russian remittances to Georgia were an astonishing ten times higher in dollar terms than the year before.īut The Economist’s analysis of data from a wide variety of sources suggests that Russia’s economy is doing better than even the most upbeat forecasts predicted, as sales of hydrocarbons have fuelled a record current-account surplus. In the first quarter of 2022, the latest available data, foreigners pulled out $15bn-worth of direct investment, easily the worst figure on record. Lots of people, especially educated types, have fled others are shifting assets out of the country. Many of the country’s 300 single-industry cities hurt by sanctions are in a full-blown depression. In the second quarter gdp fell by 4% year on year, according to official figures. Massive increases in interest rates in the spring, designed to stabilise the collapsing rouble, along with the withdrawal of foreign businesses, have pushed it into recession. “Experts predict Russia’s gdp will contract up to 15% this year, wiping out the last 15 years of economic gains,” the White House reported.īoth sides of the debate agree the country is still hurting. Within a month analysts had revised down their forecasts for Russian gdp in 2022 from growth of 2.5% to a decline of close to 10%. Western companies pulled out of Russia, or pledged to do so, by the hundred, as their governments slapped on sanctions. The stockmarket crashed, forcing regulators to suspend trading. The rouble lost more than a quarter of its value against the dollar. After Russia invaded Ukraine, its economy went into free fall.
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