Russia’s former deputy finance minister said the country’s economy could grow by 5-6% if it weren’t for Western sanctions.
“Without sanctions, the Russian economy would have grown by 6%,” said Oleg Vyugin, a former deputy finance minister and former deputy governor of Russia’s central bank. “In the January-February period, people were hoping for a strong burst of growth. However, instead of 5% growth, we dropped 4%. So the sanctions worked.”
However, Mr. Vyugin insists that Western sanctions are “not catastrophic” for the Russian economy, as they are only 30-40% effective because Moscow has come up with many ways to deal with it.
Russian officials have praised the country’s economic prowess in the face of sanctions. President Vladimir Putin forecast a 2% decline in GDP this year, more optimistic than the 3% decline forecast by the Russian Economy Ministry. The World Bank in April even warned that Russia’s GDP could fall by up to 11.2%.
Russia’s current account surplus, the difference between the value of exports and imports, for the first eight months of 2022 was three times higher than in the same period last year, at $183.1 billion, as revenue increased while sanctions caused imports to plunge.
After imposing harsh sanctions, including removing Russia from the SWIFT financial system, the West is preparing to limit the use of Russian oil and gas. Vyugin hopes some sanctions will not affect Russia quickly, especially in the technology sector, where it relies heavily on imports.
“The world will develop, but Russia will only use old technologies and spend huge resources to recreate what is already there because it cannot be imported. If the situation does not change, Russia may see the level of progress. technological development declines,” Vyugin warned.
Thanh Tam (Theo Reuters)