Russian economy could take a decade to return to pre-sanctions levels, Sberbank says
(Reuters) – Russia’s economy could take a decade to return to pre-2021 sanctions levels, the chief executive of the country’s top bank, Sberbank, said on Friday as economic restrictions cut the country half of its trade.
Western countries have imposed economic sanctions on Russia, the toughest a country has faced in modern history, after Moscow sent troops to Ukraine on February 24, calling it a “special military operation”.
Russian assets were immediately hit and consumer prices soared, prompting authorities to implement capital controls, raise the policy rate and limit the ability of foreign investors to sell their assets in Russia.
German Gref, whose bank is seen as a proxy for the Russian economy by holding the majority of household deposits and business loans, estimated on Friday that countries that hit Russia with sanctions accounted for 56% of its exports and 51% of its imports.
“It’s a threat to 15% of the country’s gross domestic product, the bulk of the economy is under fire,” Gref, a former economy minister, told Russia’s annual international economic forum in Saint PETERSBOURG.
“As a result – and if we do nothing – we could need around a decade to bring the economy back to 2021 levels,” Gref said, calling for structural reform of Russia’s economy.
Sanctions on Russian banks have largely curtailed financial transactions with foreign counterparts, while Russia is also barred from receiving essential equipment and parts for its automotive, energy and aviation industries.
According to Gref, cargo shipments have increased sixfold while sea and air transport have also been hampered as sanctions have prevented Russian airlines from flying west and Russian-flagged ships have been banned from entering EU ports.
While acknowledging major setbacks, Russian officials said the economy was doing better than initially expected, with some flows already diversifying and rising energy prices – partly resulting from the sanctions – helping Russia’s revenue. State.
As the European Union prepares to ditch Russian fossil fuels by 2027, Russia has redirected more than half of its oil supplies to Asia, says Alexander Dyukov, head of the third-largest oil producer of the country, Gazprom Neft, at the same forum.
Dmitry Pankov, managing director of Delo Group, which operates Russia’s leading rail freight company Transcontainer and Global Ports company with sea terminals in the northwest, far east and south of the country, said that although the drop in freight shipments continues, Asian customers have started to emerge. .
“These are not global (sea freight) lines – mostly local operators,” he told the same forum on Friday.
(Reporting by Reuters; Editing by Alison Williams)
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