LONDON (CNN) Russia could be without money as early as next year and needs foreign investment, said outspoken Russian oligarch Oleg Deripaska.
“Already next year there will be no money, we need foreign investors,” he told an economic conference in Siberia on Thursday, according to comments reported by TASS, a Russian state news agency.
The comments of the billionaire, who called for an end to the Moscow war in Ukraine in the early days of last year’s conflict, contrast with a more optimistic assessment of Russia’s economic development by President Vladimir Putin last week. Putin praised the resilience of the country’s economy in the face of unprecedented Western sanctions imposed last year.
According to preliminary estimates by the government, Russia’s economic output shrank by 2.1% last year. The contraction was more limited than many economists initially predicted.
But cracks are emerging – Russia is cutting oil production this month – and western sanctions could escalate further. Ultimately, Russia’s economic prospects depend on what happens in Ukraine.
Foreign investors, especially from “friendly” countries, also played a big role, Deripaska said. Whether they come depends on whether Russia can create the right conditions and make its markets attractive, he was quoted as saying.
To starve Russia of the funds for its aggression, Western countries have announced more than 11,300 sanctions and frozen around $300 billion in Russian foreign exchange reserves since the invasion in February 2022.
But China has thrown an economic lifeline at the Kremlin by buying Russian energy, replacing Western suppliers of machinery and base metals and other products, and offering an alternative to the US dollar.
Quiet, Moscow has a steep hill to climb to replace the revenue lost as a result of the sanctions, not least from exports. Data released on Friday showed that the value of European Union imports from Russia fell by 51% between February and December last year. The bloc was one of the most important trading partners for Russia before invading Ukraine, with 38% of Russian exports going to the European Union in 2020.
The Russian government’s revenue fell 35% year on year in January while spending rose 59%, resulting in a budget deficit of about 1,761 billion rubles ($23.3 billion).
Deripaska made his aluminum fortune during the chaotic scramble for assets after the collapse of the Soviet Union. In 2018, he was sanctioned by the United States, which stated that the oligarch “does not secede from the Russian state.” Last year he was charged with allegedly violating US sanctions.
Forbes estimates Deripaska’s current net worth at just under $3 billion.
— Anna Chernova contributed to the reporting.