Sanctions Are 30% to 40% Effective

• Sanctions against Russia are 30 to 40 percent effective, a former financial official told Reuters.
• But Oleg Vieukin said the sanctions would disrupt Russia’s economic growth for years to come.
• Russia’s tech industry will also be affected by sanctions because it relies on foreign imports.

Oleg Vyugin, a former senior Treasury official and central bank official, said Western sanctions against Russia over the invasion of Ukraine were 30 to 40 percent effective, but there were downsides. Reuters Tuesday.

His comment is Russian economy Nearly seven months after imposing trade restrictions, it continues to show resilience. Deputy Finance Minister and Deputy Governor of the Bank of Russia Vieukin added that Russia has taken steps to overcome the challenges posed by sanctions. He retired from the Moscow Exchange this year.

While the sanctions have not been fully effective, Vieukin told Reuters that “the main result of the sanctions is that Russia’s economic growth process has been interrupted for several years.”

The country’s economy got off to a strong start in January and February and is on track for a 6 percent growth in 2022 if sanctions are not imposed, Vieugene said. But now there is a “negative impact,” he told Reuters, adding, “So the sanctions are working.”

For now, Russian economy The second quarter of 2022 (the first full quarter after the war began) contracted 4% year over year. Russia’s economy ministry expects GDP to contract by 2.9 percent in 2022, a government official said in early September. Reuters. That’s significantly lower than the World Bank’s forecast: it expects an 11% contraction.

Russia could face more problems as its biggest customer, the European Union, is weaning itself from a heavy reliance on Russian energy, with most crude imports set to be banned by the end of 2022.

Vieukin said that if Russian exports were restricted, there would be “serious damage” to the economy.

The situation on the import side is also not optimistic, and shortages of some products could hit Russia’s industry hard. This will apply to Russia’s import-dependent tech sector, Vieukin told the news agency.

“The world will move forward, but Russia will only use some second-rate technology and spend enormous resources to rebuild what the world already has, but cannot import it,” Vieukin said. “If the situation does not change, the level of technological development in Russia will gradually decline.”

Russia’s state-owned airline Aeroflot has started stripping spare parts from working planes due to supply shortages due to sanctions, Reuters Reported in August.