Russia and Ukraine flashpoint

[Bofferbrauer2]

Biggerboat1 said:

BBC News - Russia's economy shrinks by less than expected
https://www.bbc.co.uk/news/business-64708832

This is slightly dated info now (article is from end of Feb), but it seems nuts that Russia's economy only shrank by 2% last year...

So all of the sanctions & the pulling out of major western investment resulted in that small of a contraction - crazy.

I would have thought the conscription off the 100k+ young men alone would have had that level of effect... (I.e. young men in their prime being removed from businesses)

Is there any reason to think their economy will be hit harder this year? I know gas/oil prices have been returning to somewhat normal levels, so maybe that will reveal deeper effects that have thus far been masked by inflated energy prices.

I fear the only real incentive for putin to be given the boot will be financial. Think he & his cronies couldn't care less about the cost in blood.

Weapons and soldiers are expensive. The massive expansion of weapons production and extended military service has masked the drop in the rest of the economy for the most part. Also, Putin played around with the economy in ways that push the GDP short-term, like the fact that everything must be payed in Roubles, including their exports, whose value got artificially inflated.

Also, sanctions take some time to really take a grip, especially since they got implemented sequentially, not all at once.

Finally, the sanctions were designed to hit the common people the least possible (for instance, food and medicine are not sanctioned at all), instead targeting Putin, his cronies and their military efforts directly. This results in a smaller hit for the economy at large, instead hitting their ability to wage the war against Ukraine and to profit from it.

Make no mistake, these sanctions bite, especially those it should bite.