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“RUSSIA IS A gas station masquerading as a country,” quipped the late John McCain, an American senator and former presidential nominee, in 2015. In many respects, McCain was right: Russia’s earnings from oil and gas have helped it to weather the economic sanctions imposed on it by Western countries in response to its invasion of Ukraine. On June 10th the central bank announced that it would cut interest rates back to 9.5%—where they were before the war began.
The normalisation of its key policy rate is just one sign that Russia’s economy has shrugged off the effect of Western sanctions. Take the rouble. The central bank doubled interest rates to 20% in the aftermath of the invasion to help prevent the currency, which had depreciated sharply against the dollar, from falling further. The policy seems to have worked. By late April the rouble had recovered all of its losses, allowing the central bank to ease interest rates gradually. The rouble is now 30% above its pre-invasion level and the central bank is expected to cut interest rates further in due course.
The high prices of oil and gas have helped, too. Although the European Union has agreed to boycott 75% of imported Russian oil, the country has been able to find alternative buyers for its fuels. According to estimates from the Institute of International Finance, a trade association for banks, Russia’s earnings from exports over the past three months were 65% higher than in the same period last year. Imports meanwhile, some of which are subject to Western sanctions, are down by 20%. The net result is a trade balance for the past three months nearly four times higher than a year before. That has provided Russia with plenty of cash to prop up its currency and fuel its war.
Yet the economic pain is being felt elsewhere in Russia. The rising price of imports pushed consumer-price inflation up from 9% in February to 17% in May, far above the central bank’s target of 4%. Inflation may now have levelled off, but ordinary Russians are facing shortages of many Western goods: sanctions have caused sales of new cars to fall by four-fifths, and many shops and restaurants are shuttered. Economists expect that imports will have to rise to restore balance to the economy.
Though forecasts differ, most also expect the Russian economy to shrink by between 7.5% and 12.5% this year, according to a Bloomberg poll. On June 8th the OECD, a club of mostly rich countries, said it expected Russia’s GDP to shrink by 10% this year and another 4% in 2023. If that comes true, the economy would be just one-sixth the size of America’s by 2024—when Vladimir Putin will probably seek a fifth presidential term. It will be clear by then whether his effort to restore Russia’s influence in the world by invading Ukraine has only resulted in diminishing the status of his country.
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read moreAs time went by, this blog was developed for many different purposes. Last time, I had a lot of pleasure in sharing some of my Lego-related hobbies. However, I will mostly upload a blog about bikes and their development in the next few months! Recently, I have so much into ebike cargo. They say this type of bike can replace the car! And I am very into it since my place is crowded with traffic jams! The video above showed a funny situation: I started the review from Brooks's handle! And after nine years! It's still an excellent bike handle and not even destroyed!
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Hi, hi, hi. So, it's been a while for the last couple of weeks since I have considered buying a cargo bike. The reason is that I am often trapped in a traffic jam because I can't get faster in my car.
read moreIndonesia has launched Southeast Asia’s first-ever bullet train, a high-speed rail line connecting two of its largest cities.
Congrats! Indonesia launched Southeast Asia’s first bullet train.
Custom LEGO Transformers Devastator
My faith in humanity is restored! OK, that’s a bit overboard – but you couldn’t blame me if you see an incredibly, exquisitely and wonderfully executed custom LEGO Transformers Devastator such as this by Alex Jones. I feel transported to the 80’s once again, with the same intense childhood wonder when I first saw the Constructicons combine and become the formidable Devastator.
Collaboratively administrate empowered markets via plug-and-play networks. Dynamically procrastinate B2C users after installed base benefits. Dramatically visualize customer directed convergence without
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