Russian economy withstood sanctions better than expected

The largest investment bank of America Business sentiment surveys “are signaling a shallow recession in Russia, and therefore potentially upside risk to our growth forecasts,” said the business sentiment survey.

JPMorgan Chase also cited indicators such as electricity consumption and financial flows, showing that the Russian economy is in better shape than anticipated.

“The data does not currently indicate a sudden drop in activity, at least for the time being,” Business Insider quoted JPMorgan analysts as reporting.

The big US bank also revised its previous forecasts of a 35% decline in Russian GDP for the second quarter and 7% for the whole of 2022. For now, these Russian data seem less alarming.

However, the bank noted, the impact of orders punish Russia present and potential would be felt, and Russia’s economy would be in much better shape if it hadn’t launched a campaign in Ukraine.

“We expect the impact of sanctions to continue to increase in the coming quarters. As a result, the structure of GDP increasingly seems to be suitable for a prolonged but not too strong recession,” the analysts predicted. Experts also note that Russian export orders are showing signs of decline.

Russia faces economic sanctions unprecedented since the start of its military operation in Ukraine. America has ordered Russian oil embargoone of Russia’s main exports while the EU is preparing a 6th package of sanctions against Russia and is also considering a ban on Russian oil.

Russia was cut off from the SWIFT interbank messaging system, while many Russian banks, organizations and individuals were sanctioned. Assets, including half of Russia’s foreign exchange reserves, have been frozen.

Russia responded with countermeasures and sought to bring ruble back to pre-conflict levels after the ruble’s historic drop. Still, analysts say, there’s still a lot of uncertainty about the future of the Russian economy.