Russia’s economy is taking a beating under Western sanctions, internal report says

Russia’s economy is taking a beating under Western sanctions, internal report says
FILE PHOTO – Russia’s President Vladimir Putin attends a parade marking Navy Day in Saint Petersburg, Russia July 31, 2022. REUTERS/Maxim Shemetov

Since the start of the Russian invasion of Ukraine, the West has hit Russia pretty hard with a wide range of sanctions. But Russia has been pretty upbeat about the situation, mainly using the sanctions as a reason it can’t put much effort into helping the West out with energy issues and saying that the damage internally to its economy is minimal.

Well, a report internal to the Russian government leaked to Bloomberg reveals otherwise. The report says that even the best estimates show three years of GDP loss in the country (more negative estimates say at least eight) and that the country is going to go through a drop in exports, take a hit to its oil industry and perhaps not be able to get the imports it needs. Plus, the report outlined a possible brain drain from the country, estimating that 200,000 IT specialists could leave by 2025 because of the economic situation.

This report is pretty intensive, too – it isn’t just some email. It took months of work from several departments in the Russian government to compile the internal data intended for high-level, closed-door meetings.

Key comments:

The report says that the country will see “reduced production volumes in a range of export-oriented sectors,” and that oil, gas, metals and chemicals “will cease to be the drivers of the economy.”

“There are simply no alternative suppliers for some critical imports,” the report says, outlining how the Russian economy and food supply could suffer from a lack of imports. 80% of pharmaceutical production and 99% of poultry production rely heavily on imports.

“We can already confidently say that this policy toward Russia has failed,” Russian President Vladimir Putin told his officials in April regarding Western sanctions. “The strategy of an economic blitzkrieg has failed.”