“The sanctions imposed on the Russian economy in the medium term can have a really negative impact on it,” said the Russian President.
By Le Figaro with AFP
Published on 03/29/2023 at 13:57, updated on 03/29/2023 at 14:57
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The Russian President, end of March. GAVRIIL GRIGOROV / AFP
Vladimir Putin said on Wednesday that international sanctions against Moscow over its offensive in Ukraine could have “negative” consequences for the national economy “in the medium term” after nonetheless praising Russia’s adjustment to this new situation in recent months.
“The medium-term sanctions imposed on the Russian economy can have a really negative impact on it,” the Russian president warned at a televised meeting with the government. This is the first time that Vladimir Putin has publicly admitted that the rain of international sanctions affecting many sectors of Russian activity, including the strategic oil and gas sector, is affecting the national economy.
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More than a year after the start of the offensive in Ukraine, “unemployment is at its lowest at 3.6%” and “inflation will fall below 4% at the end of March” after rising to almost 20% last spring, said the Russian President. “But that doesn’t mean that all problems have been solved,” he warned members of his government. “The return to a growth path should not let us relax,” he further supported in a rare indictment, calling for Russia’s “guarantee of economic sovereignty”.
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Start new projects quickly
Vladimir Putin therefore called on the government and business leaders to “ensure the rapid launch of new projects in the manufacturing industry, especially in the production of high-tech products,” a sector affected by the brain drain of many skilled workers from abroad. “Our financial system should play an important role in meeting the needs of exporters. And we need to replace the Western companies that have been working in this niche.”
Vladimir Putin’s comments come a week after a summit in Moscow with his Chinese counterpart Xi Jinping, at which the two leaders said they wanted to “deepen” Russia-China economic ties. However, many observers saw this as a sign of Moscow’s growing dependence on Beijing, whose economy has largely captured Russian gas and oil exports, which are targets of Western sanctions. While these new outlets have allowed Russia to partially offset lost markets in Europe, its reliance on Asian heavyweights actually allows China and India to be in a position of strength and negotiate prices as prices fall.
Finally, in his speech to the Federal Assembly at the end of February, Vladimir Putin called on the Russian oligarchs to repatriate their funds to Russia to prop up the national economy.