The Russian Central Bank has stopped pretending. It demands that the Kremlin has less control over the economy
Added: yesterday 09:407,4902
Elwira Nabiullina, head of the Russian central bank / Source: Shutterstock
The first such report since the beginning of the war in Ukraine. The Russian Central Bank shows pessimistic data. The invasion is already taking a toll on the economy.
The Russian Central Bank has published a report on the state of the economy for the first time since the beginning of the war in Ukraine.
The data is definitely more pessimistic than what Russian propaganda is trying to present. The head of the institution, Elvira Nabiullina, signed the report.
The Russian Central Bank predicts a crisis.
The Russian Central Bank has ceased to conceal the fact that the armed invasion of Ukraine had a very strong impact on the country's finances. In the report published on the institution's website, we read, inter alia, that Western sanctions, which cut the country off from access to technology and import opportunities, will have a very strong impact on reducing the potential and competitiveness of the economy. The institution responsible for the monetary policy of the state believes that a sharp decline in GDP should be expected. The main reason, of course, will be the drastic reduction in exports of Russian goods due to blocked outlets.
The second important factor is the decline in the quality of imports. Russia has been cut off from the possibility of obtaining most goods from the West, as well as from the technologies of companies that do not want or cannot cooperate with Russia due to economic sanctions. This means that even if Russia finds economic partners, the imports will be of much lower quality, which will limit the possibility of an economic rebound in the near future.
Russia needs the liberalization of the economy.
The report shows that a necessary condition for the recovery from the economic crisis and the survival of Russian companies is much greater freedom of action on the market. The Russian Central Bank clearly indicates that the state's influence on the economy should be limited and entrepreneurs should be allowed to act more free market. To this end, the institution forecasts the necessity to carry out serious economic reforms. One of the main assumptions would be to reduce taxes imposed on enterprises.
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