LONDON – Russian automaker Autotor has been hit by production after its embargo on its assembly plant in Kaliningrad. Announced Free lottery for 10 acres of land – and the opportunity to buy seed potatoes – so employees in the western edge of the Russian Empire can grow their own food in “difficult economic conditions”.
In Moscow, shopkeepers complained that the price of a kilo of bananas had risen from 60 to 100 rubles, while the price of tampons had doubled to $ 7 at a store in the Siberian industrial city of Irkutsk.
Banks Receipts have been shortened in response to paper shortages. Clothing manufacturers The buttons said they were exhausted.
“Economic prospects for Russia are particularly bleak” Bank of Finland Said in an analysis this month. “By launching a brutal war against Ukraine, Russia has chosen to become poorer and less economically influential.”
Although Central Bank of Russia It expects a shocking inflation rate of between 18 and 23 percent this year, and a 10 percent drop in GDP.
The impact of war and sanctions on the Russian economy can not be overemphasized It is illegal to use the terms “war” and “invasion”. President Vladimir V. Putin has stressed that the economy is slowing down due to measures imposed by the United States, Europe and other countries.
The financial maneuvers taken by Moscow initially helped to blunt the economic damage. At the beginning of the conflict, the central bank doubled interest rates to 19 percent to stabilize the currency, and more recently Low rates Up to 14 percent. The Ruble trading At the highest level for more than two years.
Rystad Energy says tax revenue on oil has exceeded $ 180 billion this year, despite the fact that Russia has to sell oil at a discount, despite a dizzying increase in world prices and production cuts. Natural gas supplies will add another $ 80 billion to Moscow’s treasury.
However, Mr. Putin has shown some signs of pressure from abroad to push back the military offensive against Ukraine.
Still, Autodor’s Vegetable Patch lottery and the vulnerabilities, shortages and price hikes facing the Russian people are indicative of the economic crisis that has gripped some Russian businesses and workers since the war began almost three months ago.
Analysts say the rift with many of the world’s largest trading partners and technologists could cause deep and lasting damage to the Russian economy.
“The most difficult times for the Russian economy are still ahead of us,” said Laura Solango, senior adviser at the Bank of Finland’s Institute for Emerging Economies.
Ms. Solanko said the stock of materials and spare parts that businesses murmur would run out in a few months. At the same time, the lack of sophisticated technology and foreign investment will hamper Russia’s productivity.
The Russian central bank has already acknowledged that consumer demand and lending are in a downward spiral, and that “businesses are experiencing significant difficulties in manufacturing and logistics.”
Evan Koklov, who co-founded the show with 12Storeez, a clothing company that has grown from a showroom in his apartment in Yekaterinburg to 1,000 employees and 46 stores, is fighting the issue head-on.
“With each new hurdle, it becomes harder to produce our products on time,” Mr. Koklov said. The company’s bank account was still frozen in Europe due to sanctions after the invasion, while logistics disruption forced him to raise prices.
“We are facing delays, disruptions and price hikes,” he said. “As the logistics with Europe are destroyed, we trust China more and have its own difficulties.”
Hundreds of foreign companies According to accounts held by the Yale School of Management they have already reduced or completely withdrawn their business in Russia. The outflow of companies continued this week as well McDonald’s. Three decades later, the company said it plans to sell its business, which includes 850 restaurants and owners and employs 62,000 people in Russia.
“I graduated from the first McDonald’s opened in Russia in the 90s,” said Artem Komolyadov, a 31-year-old technical worker in Moscow. “Now it’s completely empty. Loneliness. The identity still hangs. But inside it’s all blocked out. It’s completely dead.
Nearby two police officers were detained wearing bulletproof vests and automatic rifles, he said, ready to intervene with any protesters.
At Leningradsky railway station, one of the few owners who opened on Monday, Customers lined up More than an hour for the last taste of McDonald’s hamburgers and fries.
French automaker Renault On Monday it announced an agreement with the Russian government to leave the country, although it also has the option of repurchasing its shares within six years. And Finnish Paper Company, Great EnzoHe said he would withdraw himself from three corrugated packaging plants in Russia.
Even more profound damage to the structure of the Russian economy will increase in making money in the coming years Department of Energy.
Europe’s vow to eventually withdraw Russia’s oil and gas will force Moscow to look for customers, especially in China and India. But Daria Melnik, a senior analyst at Rystad Energy, a pioneer for Asia, said “it will take time and massive infrastructure investment to see Russia’s production and revenues fall sharply in the medium term.”
Without adequate storage capacity, Russia will have to reduce its overall oil and gas production. Wells do not look like pipes, however, and can be easily turned on and off. Hat one, often it can not be reused.
“Some Russian spare capacity will be destroyed,” Ms. Melnik said about the country’s oil flow.
Anton Siluvanov, Russia’s finance minister, said the sanctions could be as long as possible 17 percent decline In oil production this year.
The big declines are evident in other sectors. Passengers Car manufacturing It was down 72 percent in March compared to last year.
In the industrial sector, which includes chemicals, oil, gas and manufacturing, the four-week average import volume is 88 percent lower than it was in early February, according to Forkites, which monitors supply chains before the invasion. Consumer-related imports are down 76 percent, making it harder for Russians to buy tampons and cell phones, and making it harder for hospitals to get replacement parts and supplies for dialysis machines and ventilators.
In a survey of health care experts in April, 60 percent of respondents said they already experienced shortages. Imported items, missing items include disposable gloves, catheters and sewing materials.
For consumers, the rise in prices of basic commodities is very noticeable Twitter account Palmolive shampoo has grown to mock the social media posts of Russians lamenting the rise in prices from nectarines. It is called but what happened? And has nearly 44,000 followers.
Asked not to use his name for fear of revenge, the 26-year-old Moscow resident said the price of imported fruits, such as bananas he puts in his oatmeal every morning, has gone up.
“This is a product I buy every time I go to the store, so I noticed it immediately,” he said. He said his total grocery bill has risen by a third.
In Irkutsk, the price of a box of tampons doubled from $ 3.50 within weeks of the war, and the 23-year-old designer, who earns $ 450 a month, asked not to be named. “For the same amount of money, I could buy a basket of good groceries or a new T-shirt,” he said, comparing prices before the war.
Outside the country, Russia’s economic opportunities are shrinking. Earlier this month, Fennovoima, a Finnish company operating nuclear power plants, abruptly resigned Announced Its founder, Mr. It is terminating its contract with the Russian state nuclear company Rosato, which lists Putin, to build a plant in the northern city of Hanhiki.
“We are very disappointed,” Rosatom, which owns a third of the project through a Finnish subsidiary, said in a statement. Report: “The reasons behind this decision are completely indescribable to us.”
Ivan Nechepurenko Contributed report.
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