Russia’s pandemic/political update: So they say in the news

RUSSIA ECONOMICS - Report 06 May 2022 by Evgeny Gavrilenkov and Alexander Kudrin

For yet another month the pandemic has not been a big issue either in the media or in the minds of ordinary Russians, as both the daily incidence rate and the death toll continued to fall (the former fell to around 5K in recent days from a peak of around 200K in mid-February). It was another irregular circumstance that continued to prevail in the information space: Russia's long-lasting “special military operation”. So far, the majority of Russians think the country continues to move in the right direction. But the longer the “military operation” lasts, the greater the chance that the percentage of those who think about it in a rather optimistic fashion will continue to fall.

As the West continues to work on various packages of sanctions so that the sixth package is likely to hit the Russian oil and gas sector along with a greater number of banks, it is worth mentioning that, fundamentally, Russia might also be interested in reducing its energy exports, especially to the “unfriendly” countries. Saving money offshore is dangerous due to the high risk of confiscation, and in such an environment Russia’s trade and current account surpluses look too strong this year as imports from the Western countries are set to shrink further so that the euro, for example, may become in Russia a currency as equally exotic and unnecessary as the Australian dollar. The ruble has already strengthened too much and will inevitably start hurting manufacturing exports to the “friendly” part of the world as the 60-65 USD/RUB range implies a very strong appreciation of the currency in real terms. It may look a bit paradoxical, but to allow the non-energy segment of the economy to weather the current geopolitical pandemic, Russia may need to sacrifice its energy exporting business and voluntarily and significantly reduce exports of gas, crude oil and refined products, as well. This may start happening even ahead of the restrictions to be imposed by the West.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.