Official Russian statistics recorded for the first time the effect of the sanctions imposed after the invasion of Ukraine, which began on February 24. According to an estimate by the national agency Rosstat, Russia’s gross domestic product (GDP) contracted by 4% in the second quarter compared to the same period in 2021.
GDP rose “96% (of its value) the same period in 2021, according to preliminary estimates”, the agency wrote in a statement, adding that a more comprehensive assessment would be released on September 9. Russian GDP had recorded growth of 3.5% over one year in the first quarter of 2022, but the trend has reversed, and it should quickly find itself in recession. The IMF predicts a fall in GDP of 6% for 2022 and 2.3 for 2023.
Many sectors impacted
Imports have fallen by more than 50% this year, all sectors combined. This decline has consequences for production. Russia in particular lacks electronic components: this is one of the sanctions decided upon since the start of the war. Vladimir Putin, in a televised address in mid-July, acknowledged the challenge: “Today, we are putting in place against our country not only limitations, but also an almost total blockage to access high technologies. »
Semiconductors are essential for the production of military equipment and in particular missiles. According to Washington Postthe Russian army is forced to recycle components of household appliances to produce weapons.
Russian oil sold at bargain prices
The automotive sector is also badly affected: sales of foreign cars in Russia have fallen by around 95%, according to a study by Yale researchers.
Russia also had to find new outlets for its oil and gas. Europe plans to cut its imports of Russian oil by 90% by the end of the year. The country has found new customers in China and India, but they are buying below world prices. Russian GDP is 39% dependent on hydrocarbons.
The private sector finds strategies to circumvent the sanctions: companies open accounts in China or Turkey, some relocate to Dubai or to Central Asian countries such as Kazakhstan.
Galloping inflation
Sanctions also have an effect on the level of prices. Inflation broke a 20-year record and remains at 15.10% over one year, according to data from Rosstat. Food prices are particularly affected by the increase. They increased by 19.1% year on year in June, in particular basic products such as sugar (+ 48%), cereals (+ 35%), pasta (+ 28%) and butter (+ 26%) .
This rise in prices undermines the purchasing power of Russians, who have little savings, and causes their consumption to melt by more than 10% over one year.