When Russia launched its full-scale invasion of Ukraine one year ago, Western countries hit back with unprecedented sanctions to punish Moscow and pile pressure on President Vladimir Putin. The aim: to deal an economic blow so severe that Putin would reconsider his brutal war.<\/p>\n\n\n\n
Russia\u2019s economy did weaken as a result. But it also showed surprising resilience. As demand for Russian oil fell in Europe, Moscow redirected its barrels to Asia. The country\u2019s central bank staved off a currency crisis with aggressive capital controls and interest rate hikes. Military expenditure supported the industrial sector, while the scramble to replace Western equipment and technology lifted investment.<\/p>\n\n\n\n
\u201cThe Russian economy and system of government have turned out to be much stronger than the West believed<\/p>\n\n\n\n
Yet cracks are starting to show and they will widen over the next 12 months. The European Union \u2014 which spent more than $100 billion on Russian fossil fuels in 2021 \u2014 has made huge strides in phasing out purchases. The bloc, which dramatically reduced its dependence on Russian natural gas last year, officially banned most imports of Russian crude oil by sea in December. It enacted a similar block on refined oil products this month.<\/p>\n\n\n\n
Those measures are already straining Russia\u2019s finances as it struggles to find replacement customers willing to pay high prices. The government reported a budget deficit of about 1,761 billion rubles ($23.5 billion) for January. Expenditure jumped 59% year-over-year, while revenue plunged 35%.<\/p>\n\n\n\n
\u201cThe era of windfall profits from the oil and gas market for Russia is over.<\/p>\n\n\n\n
Meanwhile, the ruble has slumped to its weakest level against the US dollar since last April. The currency\u2019s weakness has contributed to high inflation. And most businesses say they can\u2019t conceive of growing right now given high levels of economic uncertainty, according to a recent survey by a Russian think tank.<\/p>\n\n\n\n
These dynamics place the country\u2019s economy on a trajectory of decline. And they will force Putin to choose between ramping up military spending and investing in social goods like housing and education \u2014 a decision that could have consequences both for the war and the Russian public\u2019s support of it.<\/p>\n\n\n\n
Resource: CNN BUSINESS <\/p>\n\n\n\n
Manager\u2019s Office Team<\/strong><\/p>","protected":false},"excerpt":{"rendered":" When Russia launched its full-scale invasion of Ukraine one year ago, Western countries hit back with unprecedented sanctions to punish…<\/p>","protected":false},"author":3,"featured_media":11936,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":""},"categories":[189,153],"tags":[],"yoast_head":"\n