How is Russia weathering those tough sanctions? Just fine, thank you. From Alex Kimani at oilprice.com (hardly a Russia propaganda outfit):
- Continued oil and gas exports as well as a propped-up ruble, have allowed Moscow to weather Western sanctions.
- JPM has backtracked on its earlier forecasts of a 35% contraction in Russian GDP in the second quarter.
- The lion’s share of Russian raw materials is traded via Switzerland and its nearly 1,000 commodity firms.
A couple of weeks ago, Putin went on record calling the war in Ukraine a “tragedy” and claiming that economic sanctions imposed on his country had “failed.” Turns out he wasn’t exactly bluffing.
Three months into the most severe and coordinated sanctions by Western governments, Russia’s economy is proving to be a hard nut to crack. Continued oil and gas exports as well as a propped-up ruble, have allowed Moscow to weather the West’s sanctions much better than expected.
In a note to clients dated last week and made public on Monday, JPMorgan Chase says business sentiment surveys from the country “are signaling a not very deep recession in Russia, and therefore imply upside risks to our growth forecasts. The data at hand therefore do not point to an abrupt plunge in activity, at least for now”.
JPM has also backtracked on its earlier forecasts of a 35% contraction in Russian GDP in the second quarter and 7% for all of 2022, now predicting that the recession will be far less severe.