Experts say that Western sanctions are “catastrophically” affecting Russia’s economy, despite Vladimir Putin’s attempts to conceal the damage.
Yale analysts who looked at “private Russian language” and “unusual data sources” found that imports have “collapsed”, and domestic production has “come to a complete halt”.
Russia lost around two-fifths of its GDP in companies that were owned by Western companies. This exodus, they claim, has undone three decades’ worth of foreign investment.
According to the report, Putin is being forced into “unsustainable, drastic” fiscal and monetary interventions.
Yale’s Chief Executive Leadership Institute describes the report as “one the first comprehensive economic analyses” showing how Russia’s economy fare five months after the invasion of Ukraine.
It is a lie to claim that the West, which has many countries struggling with rising inflation due to the conflict, is doing worse than Russia in the war on economic attrition unleashed through unprecedented sanctions.
Professor Jeffrey Sonnenfeld led a team of analysts who concluded that Russia is more economically damaged than most people in the West realize. In an attempt to hide the damage, the Kremlin has reduced the number of data releases that it issues since the invasion.
Analysts wrote that “Since the invasion the Kremlin has become increasingly selective in its economic releases, selectively tossing unfavourable metrics and releasing only those which are more favourable.”
“These Putin-selected statistics then are carelessly trumpeted over media and used by reams well-meaning, but careless experts to build out forecasts that are excessively, unrealistically favourable to the Kremlin.”
The analysis included data not available to the public by investment banks, high-frequency data, releases from foreign partners, and documents from Russia.
The study found that the withdrawal of over 1,000 Russian companies had impacted revenues and investments by $600bn.
This is approximately 40% of Russia’s GDP. Analysts stated that while these exits might not have an immediate effect, they would force Russia to undergo a “dramatic and forced” economic transformation. These companies employed around a million people in Russia.
They stated that the findings of a comprehensive economic analysis of Russia were powerful and undisputed: sanctions and business retreats have not only worked but have also severely crippled Russia’s economy at all levels.
