August 16, 2022

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Study says Russia's economy is collapsing amid stifling sanctions

Study says Russia’s economy is collapsing amid stifling sanctions

The Russian economy is on the verge of collapse with the start of international sanctions, according to a report Yale University study released this month.

The analysis, which the authors say is based on consumer, trade and shipping data, shows the economy is in danger of collapse as foreign companies leave and sanctions persist.

“From our analysis, it becomes clear that business setbacks and sanctions are disastrously crippling the Russian economy,” the authors wrote.

“As the Russian invasion of Ukraine enters its fifth month, a common narrative has emerged that world unity vis-à-vis Russia has somehow turned into a war of economic attrition that casts a shadow over the West,” the study reads, adding, “This is simply not true.”

ruble Stunning performance in the wake of unprecedented economic isolation Some analysts attribute it to the favorable commodity markets in a country that relies on oil and gas exports.

Others pointed to Russian President Vladimir Putin’s demand to buy these goods in rubles only, and the Central Bank’s restrictions on Russian stock and bond holders paying dividends outside the country.

Russia invaded Ukraine on February 24.
Alexey Mashev, Sputnik / The Associated Press

The Yale study argues, however, that Russia is now trading its goods from a position of weakness and has had to shift from supplying most of Europe to sub-par deals in secondary markets.

The authors claim that Putin’s “clearly unsustainable” monetary policy has driven the Russian government into impotence.

The study claims that nearly 40% of Russia’s GDP was lost as foreign companies pulled back from the Russian economy, “reversing nearly three decades of foreign investment.”

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Yale professors also say that domestic production of goods in Russia has virtually halted, causing supply shortages and raising consumer prices.

The authors wrote that this shook confidence in the system and led to a mass exodus of capital and people.

The study concluded that “there is no way out of Russia’s economic oblivion as long as the allied countries remain united in maintaining and increasing the pressures of sanctions against Russia.”