Russia’s economy remains better than expected (EU less so), says the IMF

It is enough to provide fodder for people who say that Western sanctions against Russia are punishing Europe more than Russia. According to the International Monetary Fund (IMF), the Russian economy should, this year in any case, be less affected than expected by sanctions while, on the other hand, European countries suffer more than expected.

The Russian labor market has resisted

In fact, while it counted in April on an 8.5% fall in Russia’s gross domestic product (GDP) in 2022, the IMF now predicts only a decline of 6%. “The Russian economy contracted less than expected in the second quarter, with exports of crude oil and non-energy products holding up better than expected”, explained the International Monetary Fund. And to add:

“Furthermore, domestic demand also showed some strength thanks to the containment of the impact of sanctions on the domestic financial sector and a weaker-than-expected weakness in the labor market.”

The impact of the sanctions is more expected next year because the IMF expects a recession in the Russian economy of 3.5%, ie 1.2 points less than its previous forecasts.

Rising energy prices

On the other hand, specified the IMF, “the effects of the war on the main European economies are more negative than expected”, since the forecasts of economic growth for 2022 are actually lowered for Germany (-0.9 points of 1.2%), France (-0.6 points to 2.3%) or even Spain (-0.8 points to 4.0%).

These stronger results are due to “rising energy prices as well as declining consumer confidence and slowing manufacturing activity resulting from continued supply chain disruptions and rising costs. raw materials”, IMF details.

And a complete stoppage of gas exports to Russia “significantly” will reduce the growth of the euro zone in 2022 and 2023. This will in effect force European countries to implement energy rationing, which will affect large industrial sectors.

As for Ukraine, it could see its GDP fall by 45% in 2022 according to World Bank forecasts in June. Last week, the central bank of Ukraine announced a 25% devaluation of the national currency, the hryvnia, against the dollar in an attempt to restore competitiveness in exports.

“Putin threw Europe into the American arms of NATO and the Americans threw Putin into the Chinese” (Pascal Lamy)

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New sanctions in Britain

The United Kingdom announced on Tuesday that it would target Russia’s Justice Minister and Russian oligarchs with significant financial interests in its territory, as part of a new wave of sanctions in retaliation for Moscow’s invasion of Ukraine. . Among the forty people targeted are the Russian Minister of Justice Konstantin Chuitchenko and his deputy Oleg Sviridenko, accused “of strengthening their power to suppress the freedom of expression of Russians”, British details diplomacy in a press release. In addition to 29 Russian regional governors, London extended its sanctions to Vitali Khotsenko and Vladislav Kuznetsov, who were appointed by Moscow to senior positions in the pro-Russian separatist Ukrainian regions of Donetsk and Lugansk.

Since the start of Russia’s invasion of Ukraine, the UK has sanctioned more than 1,100 individuals and 120 companies for their links to Russian President Vladimir Putin. The new sanctions announced on Tuesday (an asset freeze and a ban on staying in Britain) also target two nephews of a Russian oligarch close to the Kremlin. One of them, Sarvar Ismaïlov, is a former administrator of the English football club Everton. London added that it had authorized Syrians “responsible for recruiting mercenaries to fight Russia’s war in Ukraine” or “supporting the Syrian regime” of Bashar al-Assad, a key ally of Moscow’s interventionist since 2015 in Syria. The European Union announced last week that it had sanctioned ten Syrian nationals and two private security companies for their involvement in the recruitment of Syrian and Palestinian mercenaries sent to fight in Ukraine on behalf of Russia.

(with AFP)