Western sanctions have helped the country restructure its economy, the outlet notes
A view shows a street decorated with flags for the upcoming Russia’s National Flag Day, celebrated on August 22, in Moscow, Russia. © Sputnik / Vitaliy Belousov
The Russian economy has proved to be much more resilient than many Western governments expected after the sweeping sanctions intended to cripple it were imposed, the New York Times reported on Monday.
Since the beginning of the military operation in Ukraine Russia’s economy has had to adapt to the dramatic changes with “astonishing speed,” the outlet wrote.
The EU, once Russia’s biggest trading partner, has severed traditional economic ties, upending well-established supply chains, while the US “used its financial might” to freeze hundreds of billions of dollars in Russian assets and cut the country off from the global financial system.
According to the article, the West’s “punishing” restrictions have in reality only helped Russia restructure its economy as the country “pumped money” into various industries at a rapid pace “putting almost every available worker into a job and raising the size of weekly paychecks.”
“Total output, which the Russian Central Bank estimates may rise as much as 2.5% this year, could outpace the European Union and possibly even the United States,” the NYT noted.
The central bank’s projection is close to the latest forecast by the International Monetary Fund, which expects Russia’s GDP to grow 2.2% this year, a sharp increase from its previous prediction of 1.5%.
That follows a 2.1% contraction in 2022, when international restrictions largely shut out Moscow from Western markets and cut off a portion of its energy exports.
The outlet noted that the impact of the sanctions was felt most acutely in the spring of 2022 when the Russian ruble tumbled and the central bank sharply hiked interest rates.
“But the ruble has since bounced back and interest rates come down,” the NYT admitted adding that Russia found “eager buyers elsewhere” for its oil, liquefied natural gas and other raw materials.
With consistent export flows, Moscow has recently begun reducing the discounts on its flagship Urals crude to the Brent benchmark, which is currently trading above the EU and G7’s $60 per barrel price cap.
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