- The situation "is very complex, very challenging," according to the governor of the Central Bank of Russia.
- Russia entered 93,000 million through the sale of hydrocarbons in the first 100 days of the war
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| Image of the headquarters of the Central Bank of Russia. |
Russia has admitted this Thursday that external conditions have changed the country's economy for a long time or even forever due to Western sanctions, which impact its productive, logistical, and technological system.
"External conditions have changed for a long time, if not forever," said the governor of the Central Bank of Russia (BCR), Elvira Nabiúlina, during a conference at the International Economic Forum in St. Petersburg.
According to the economist, it is clear that the situation "is very complex, very challenging", and therefore it is about being "flexible". "You have to respond to these changes proactively," he said.
He has argued that Russia, whose economy depends heavily on exports, must rethink this model, because now "an important part of production must benefit the domestic market."
He has also advocated removing "most of the foreign exchange restrictions" imposed by the BCR at the beginning of Russia's military campaign in Ukraine in response to sanctions as the financial system stabilizes.
It has also ensured that deposits in dollars or other currencies will not be confiscated in Russia.
Maxim Oreshkin, the adviser to Russian President Vladimir Putin, has argued that "what is happening in the world right now is not something in the short term, but tectonic changes in geopolitics."
"Things will no longer be as they were. There are no buts. And this affects all levels of government and the sooner we accept it, the better it will be for the country," he stressed.
The Minister of Economic Development, Maxim Reshetnikov, has argued that "the situation has changed dramatically."
He stated that the world economy is changing dramatically and, while the economy is under sanctions, "it has forced us to change supply chains, production chains, and the depth of the changes affects everything: social payments, budget spending, and the scope of loan programs (...)".
"We need some time, we need this time to see the structural changes" in the Russian economy, he said.
Finance Minister Anton Siluanov, in turn, considered that the division between the West and Russia "is very clear" now since globalization is based on the "friend or foe" principle.
"Globalization has become politically biased," he said while considering that it is obvious that Russia now needs a "new economic program, its own production program and also the development of essential technology" to which the country has lost access to sanctions and that "it is absolutely necessary".
Russia also needs more freedom for entrepreneurs and businessmen, as well as fewer administrative burdens and obstacles, Siluanov has said.
As for the economic outlook, which the Russian Central Bank will review in July by predicting a less pronounced recession this year than it had forecast in April, Reshetnikov has argued that the Ministry of Economic Development intends to do the same.
The BCR predicted at the end of April that the Russian economy would collapse this year between 8% and 10% due to the impact of the sanctions, which would mean the worst recession since 1994 and the worst record since President Vladimir Putin been in office.
The Russian Government predicted a contraction of 7.8%.
"We have seen improvements in forecasts in recent weeks. We can see that the measures being taken are producing good results," Reshetnikov said.