The U.S. Treasury Department's website has published an analysis by Chief Sanctions Economist Rachel Lingas on the restrictions on Russia's access to the financing and material resources needed to wage war.
The article highlights four key points:
- Russia's productivity is declining as a result of the war, the impact of sanctions, and economic pressure from the United States and its partners. Russians are expressing their dissatisfaction by leaving the country.
- Financial pressure on Russia is increasing due to higher costs and the impact of sanctions on its revenues.
- Russia's own political reactions to the sanctions are becoming increasingly costly.
- The United States and its partners are taking new measures to protect the global economy from unnecessary damage due to the war that Russia has started.
After the invasion of Ukraine in 2022, Russia's economy shrank by 2.1%. The war and sanctions have led to higher costs, a depreciating ruble, and losses in the labor market. This affects the financial balance and makes it difficult to import military materials due to sanctions. In addition, due to the economic situation and mobilization, emigration increased to 668,000 people in 2022, which is 71% higher than the previous 5-year average.
The situation is projected to deteriorate further as non-monetary sources of funding are depleted.
The full version of the article - the U.S. Department of the Treasury.