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Russia could take 10 years to recover from sanctions, says country’s biggest bank boss business news

The Russian economy could take a decade to recover from the crushing sanctions imposed on the country after invading Ukraine, a top bank executive has said.

Returning to pre-sanctions levels could take nearly 10 years as the nation remains cut off from half its trade, said German Gref, the head of Sberbank, Russia’s largest bank.

Mr Gref estimates that the countries that have severed ties with Russia are responsible for 56% of its exports and 51% of its imports, crippling the economy.

“This is a threat to 15% of the country’s gross domestic product, with most of the economy under fire,” CEO Mr Gref said at Russia’s annual international economic forum in St. Petersburg.

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Dozens of multinationals pulled out of Russia in the wake of February’s invasion of Ukraine, while a large group of countries cut off Russia’s access to the international financial network and confiscated the properties, yachts and private jets of President Vladimir Putin’s allies.

The economic isolation imposed on Russia caused the stock market and the ruble to plummet, the cost of household items to skyrocket and pushed the government to impose strict capital controls.

The Russian central bank also raised interest rates from 9.5% to 20% before lowering them again in June.

As a result of the sanctions and “if we don’t do something – it may take us about a decade to get the economy back to where we were in 2021,” Gref said.

The Chief Executive also called for structural reforms of the Russian economy.

Russia has suffered as its key logistics arteries have been severed – Russian ships have been banned from entering European Union ports, while sanctions have closed the airspace over Europe to Russian airlines.

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EU move gives troops a boost

Freight shipments have fallen six-fold, according to Mr Gref.

In May, Britain announced new sanctions targeting £1.7 billion worth of trade with Russia to “further weaken Putin’s war machine”.

These include significantly higher tariffs on imports worth £1.4 billion from Russia and bans on exports to the country worth £250 million a year.

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“Strong support” for EU membership

The measures, announced by Chancellor Rishi Sunak and Trade Minister Anne-Marie Trevelyan, mean that the total value of products has since been subject to full or partial import or export sanctions invasion of Ukraine is more than £4 billion.

The EU also announced this recently plans to halt its purchases of Russian oil and gascurrently raising more than $1 billion a day for the embattled country.

Russia could take 10 years to recover from sanctions, says country’s biggest bank boss business news

Source link Russia could take 10 years to recover from sanctions, says country’s biggest bank boss business news

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