- Russian oil and gas revenues fell 45% in the first three months of 2023 amid sanctions.
- Meanwhile, the ruble is out of its worst week of the year against the dollar.
- A recent paper found that Russia’s recession in 2022 was actually twice as bad as official data suggests.
As Moscow enters the second year of its war with Ukraine, the Russian economy continues to falter due to plummeting oil and gas export earnings and a weaker currency.
Through the first quarter of 2023, the country’s energy revenues fell 45% year-on-year to $19.6 billion due to lower oil prices and weaker gas exports.
While Russia still ships crude oil and fuel products, the data suggests the price caps imposed by the United States and its allies have had the intended dual effect of cutting revenue while products continue to flow to the market. It suggests that you have
Experts had previously predicted that sanctions targeting Russia’s energy would not have a serious impact on overall output. could push up, and Russian supplies could circumvent restrictions and end up in Europe.
However, the country’s sea exports collapsed in the first week of April. bloomberg Data show that inflows from Russian ports fell by 1.24 million barrels per day, the sharpest weekly decline since mid-December.
Alongside declining energy revenues, spending surged 34% to $99 billion, compounded by the cost of the war with Ukraine. resulting in, First quarter budget deficit of $29 billionhas rebounded sharply from a surplus of $14 billion a year ago.
Meanwhile, the ruble is falling Worst week for the dollar since April 2022down more than 5% by Friday.
The deterioration in early 2023 follows signs that Russia’s recession in 2022 was much worse than official data suggests.
Adrian Schmith and Hanna Sakhno write that countries that remove military spending from their GDP figures experienced recessions twice as bad as domestic figures indicate. Papers from the Center for Economic Policy Research in February.
“[The data] Now, stagnating property prices and lower business activity in recent months indicate further loss of momentum, which is yet to be fully reflected in official data releases. ,” the authors write.
This contributes to a bleak view of the Russian economy, as war and sanctions weigh on the long-term outlook.
Economist Konstantin Sonin said Russia faces the same fate as the Soviet Union.
“Everything that is happening is making the Russian economy more primitive and backward,” he told the Russian press. Novaya Gazeta“This makes backwardness and primitivism more entrenched.”