RUSSIAN ECONOMY ON VERGE OF COLLAPSE, WORSE FINANCIAL CRISIS TO COME

With the ongoing war and the worldwide trade restrictions against Russia, economic crisis for the Russians seems to be inevitable.

Even with a near-term ceasefire, Russia’s and Ukraine’s economies will shrink by 10% and 20%, respectively, according to the first forecast since the invasion of Ukraine.

 The European Bank for Reconstruction and Development (EBRD) says Russia’s war against neighbouring Ukraine, which broke out five weeks ago, has triggered “the biggest supply shock in 50 years”, with Russia and Ukraine the most affected. The bank now forecasts a 20% drop in Ukraine’s GDP and a 10% contraction in Russia’s economy. 

Before the war broke out, the bank had forecast growth of 3.0 percent in Russia and 3.5 percent in Ukraine this year.

The surge in the cost of essential goods such as oil, gas and metals caused by the war will have a profound impact on the economies of low-income countries in particular. Russia and Ukraine used to supply bulk commodities in excess of proportions, including wheat, corn, fertilizers, titanium and nickel. 

After getting hit with the sanctions and restricted from the SWIFT system the Russian Rubles continued to tumble.

Western companies have also stopped operations in the country.

The sanctions are hurting Russia not only in an immediate fashion but also more for the upcoming years to come as the economy will not recover immediately even after the war ends.

Ex-Russian official says Putin’s days are numbered.