Sanctions Russia, USA: Moscow economy holds, effects in 2023

According to CNN, disappointment and frustration in the Biden administration

The sanctions against Russia do not “bite” enough. Sources in the US administration have admitted to CNN that there is frustration and disappointment that the restrictive measures imposed on Moscow over the war in Ukraine have so far not had a greater impact on the Russian economy and now expect the effects to be more hard will likely materialize no earlier than the start of next year.

But the Russian economy proved far more resilient than many top Biden administration officials expected when they decided to punish the country in February, thanks largely to the record-breaking revenue it garnered in the spring and summer thanks to the surge. of energy prices. According to the Finnish Energy Research Center, Russia earned a record 93 billion euros in revenue in the first 100 days of the war from exports of oil, gas and coal. However, the Russian economy shrank by around 4% between April and June compared to the same period of the previous year. But it’s nowhere near comparable to the 15% drop some had predicted earlier this year, the US broadcaster points out.

“We expected that things like the Swift and all sanctions against Russian banks would completely destroy the Russian economy and that basically, in September, we would be dealing with a Russia that is economically much weaker than the one we are dealing with. “, admitted a senior US official, referring to the decision of the United States and Europe to exclude some Russian banks from the international banking system Swift.

Another senior administration official echoed this claim, arguing that many in Washington were hoping to see the Russian economy suffer more at this point, given the unprecedented heaviness of Western sanctions. A third source, however, pointed out that officials who prepared sanctions in the months leading up to the war always believed that the strongest consequences would not be felt immediately. “I think from the beginning we thought that when Russia invaded Ukraine and we imposed the sanctions, they would, in all likelihood, be a medium-long term sanctions regime – is his reasoning – This is because we wanted keep the pressure on Russia in the long run, while waging the war against Ukraine, and we wanted to degrade Russia’s economic and industrial capabilities. So we always saw this as a long-term game. ” there were some “initial shocks” to the Russian economy, such as when the ruble plummeted, Russia was able to recover quickly thanks to the revenue from the energy sector. However, it is his conclusion along with that of Western intelligence officials, in the long run, the Russian economy will end up suffering enormously, both from the costs of the war itself and from efforts to cut it off from global trade. “There will be long-term damage to the Russian economy and to generations of Russians – CIA director William Burns predicted in recent days – Russia will pay a very high price, I believe, for a long period of time”.