Amid the ongoing war in Ukraine, the Russian Federal Ministry of Economic Development detailed this week that Russia’s economic woes are less severe than expected. According to the Russian Ministry of Economy, gross domestic product (GDP) is expected to decline by 4.2% this year, and inflation in Russia will not be as high as economists once predicted. At the same time, inflation in the United Kingdom is expected to exceed 10%, and inflation in the European Union is expected to be similarly high. Russian President Vladimir Putin blames the U.S. for the world’s bleak economy and the ongoing war in Ukraine, stressing that the U.S. needs the “conflict to maintain its hegemony.”
The Russian Ministry of Economic Development’s forecast is much better
than originally predicted.
At the end of June, Bitcoin.com News reported that the Russian ruble hit a seven-year high against the U.S. dollar and that one economist said the world should not ignore the ruble’s exchange rate. Russia has been sanctioned by the U.S. and countless Western countries for its conflict in Ukraine. When the war began last February, analysts and economists predicted that the Russian economy would sink and would not recover from the toughest global financial restrictions in years. But American economists were baffled by the ruble’s resilience after its fiat currency bounced back a few months after the initial invasion.
This week, the Russian Ministry of Economic Developmentdetailedthat the Russian economy is performing better than expected and that while GDP will shrink this year, inflation will not be as high. The news follows higher inflation in Europe and the U.K., where the U.K. consumer price indextopped10% this week. Inflation in the U.S. has remained high, as the Consumer Price Index (CPI) hit 9.1% in June and cooled somewhat in July, hitting 8.5%. At the same time, Russia, China, and the BRICS nations are planning to create a new international reserve currency, with the Bank of Russia aiming to launch the digital ruble in 2024. The ministry once believed that the country’s GDP would shrink by 12%, but the data now show a different story.
Al Jazeera reports that ” Russia’s gross domestic product (GDP) will shrink 4.2% this year and real disposable income will fall 2.8% compared to the 7.8% and 6.8% declines seen three months ago, respectively.” According to Al Jazeera, this much smaller-than-expected decline in GDP is occurring while Russia is under sanctions from 46 countries and 9,117 financial sanctions. According to the report, the Ministry of Economy expects inflation to reach 13.4% at the end of 2022. Also, according to an Al Jazeera reporter, Russian President Vladimir Putin explained this weekthat Russia will sell “high-precision weapons and robotics” to friendly countries
Vladimir Putin blasted the U.S. government – saying Nancy Pelosi’s visit to Taiwan was “blatantly disrespectful”
Putin accused the United States of trying to maintain its economic hegemony, and in a speech in Moscow this past Tuesday, the Russian president had no problem denouncing the actions of the US government. In his speech, President Putin opined, “We need conflict to maintain our hegemony.”(35) ‘That is why we have used the Ukrainian people as cannon fodder. The situation in Ukraine shows that the United States is trying to stall the conflict and is acting in exactly the same way as it is trying to fuel conflicts in Asia, Africa, and Latin America,” the Russian president added.
Putin also condemned Nancy Pelosi’s recent visit to Taiwan, noting that the visit was deliberate.” The U.S. adventure in Taiwan was not a mere trip by an irresponsible politician. It was part of a deliberate and conscious American strategy intended to destabilize the situation and cause chaos in the region and the world at large, a blatant demonstration of disregard for the sovereignty of other countries and their own international obligations,” Putin said in a speech in Moscow on Tuesday. Furthermore, the country’s economy ministry omitted oil price forecasts and did not disclose why the data was omitted. The report noted that the Russian federal government and the Budget Committee will review the ministry’s forecasts.
The report claims JPMorgan Chase & Co, Bank of America, Citigroup, Deutsche Bank, Barclays, and Jefferies Financial are returning to Russian bonds
Although Al Jazeera’s sources are believed to be biased, American reports also confirm that the Russian economy is not as bad as once expected; CNBCreportedon Tuesday that the Russian economy is “floundering, not drowning.” Moreover,Wall Street investors have “returned to caution in the market for Russian government and corporate bonds,” according to Fox Newsand The Overshoot’sreportemphasized that “the tightening on Russia is loosening.” The Overshoot’s economic, financial, and historical author Matthew C. Klein explains that “exports from major manufacturing economies to Russia have been increasing rapidly since April.” Despite these reports, there are several accounts that take the opposite view and claim that “sanctions are devastating (the Russian economy).”
The Record contributors Sean Powers and Will Jarvis (57) said Tuesday that Russian President Vladimir Putin has said (58) that the country’s economy “is doing well, according to economists and ordinary Russians, but that is not the full story.” Explanation. Powers and Jarvis interviewed a small business owner of Russian origin who said that the sanctions have reduced his income by 20%. In addition, The Record reporter discusses the Russian economy with two members of Yale’s faculty, Jeffrey Sonnenfeld of Yale’s School of Management and Stephen Tian of Yale’s Institute for Chief Executive Leadership. According to the Yale economists, “Russia needs to export energy to save its surging economy.”
What do you think about the better-than-expected Russian GDP data forecast? What do you think about Putin’s comments and Wall Street’s return to Russian bonds? Let us know your thoughts on this subject in the comments section below.
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