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The Russian economy is faltering due to Western sanctions

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Exports collapse, energy revenues fall, ruble tumbles

ΠαραπαΙει η ρωσικor οικον&omicron μiα λoγω των κυρoσεων της Δyσης /></p>
<p> Photo: Reuters </p>
<p>From falling car sales to a collapsing current account balance, Russia's worsening economic situation is now evident. This is of course a result of the sanctions imposed on the country after the invasion of Ukraine, which have begun to leave a clear mark on the economy. Some have even blamed Russian President Vladimir Putin personally for the damage to the country, with Yale researchers saying he is “cannibalizing” the Russian economy in order to conquer Ukraine. “Most of the economy is controlled by the state, the energy and financial sectors, and Putin is raising the seed capital of these businesses to finance his war machine,” said researchers Jeffrey Sonnenfeld and Steven Tian.< /p> </p>
<p>The automotive sector is seeing a huge contraction, as since the outbreak of the war, car sales in Moscow have slipped by almost 75%, according to Business Insider. This is the result of three factors: the increase in prices, the decrease in supply and the deterioration of the consumer climate. “This reflects the weakness of the consumer in Russia. It is the most characteristic element that exists for the burdened consumer climate and the picture it paints is particularly ominous. Russians don't spend money,” Tian estimated.</p>
<p>At the same time, the number of Russians buying foreign-branded cars, which are considered luxury purchases, has almost dropped to zero. Instead, consumers are buying domestic brands of cars, many of which are experiencing mechanical problems, according to Business Insider.</p>
<p>Since the war broke out, car sales in Moscow have slipped by nearly 75 percent. %. </p>
<p>Another sign of a faltering economy is the collapse of the current account. The April-June quarter saw a 93% year-on-year contraction, slipping from a record surplus of $76.7 billion to $5.4 billion. This is a result of sanctions, which have hit the energy sector particularly hard for the Russian economy.</p>
<p>A large share of Russia's revenue came from oil and gas sales. However, the sanctions hit this source of income hard. In June, the country's finance ministry announced that revenues from oil and natural gas taxes had shrunk by 36% from a year earlier, to 571 billion rubles. Also, revenue from oil products fell 31% to 426 billion rubles.</p>
<p>The Russian currency hit 94.48 against the dollar in July, a 15-month low, as a result of massive capital outflows. , the reduction of tax revenues and the shrinking of central bank reserves. The currency fluctuations triggered a massive flight of capital, totaling more than $1 billion, from Russia's central bank. In fact, part of the outflow occurred after the recent Wagner mutiny.</p>
<p>The collapse of the currency forced the country to take desperate measures. Indicatively, the country's foreign minister appealed to Southeast Asian countries to use local currencies instead of the dollar for their commercial transactions.</p>
<div class=Source: www.kathimerini.com.cy

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