Topic: Russia's economy is 'imploding' on export decline, economists claim - page 7. (Read 3911 times)

There are two sides with two extreme/unrealistic views on the situation. One side says that the increased energy prices means West is going to freeze to death and the other side is saying that the shrunk Russian economy is going to starve them to death.

The thing is that this is a war, an economical war between East and West. They are hitting each other and the damage is seen on both sides. Interestingly enough nobody analyzes things like this. For example they say Russian imports have gone down by $X but they don't say that these imports were coming from the West and that means the Western exports have also gone down by $X. They also don't mention that Russia can find replacements for most of those imports but EU for example doesn't have the same option.
Take Siemens for example. The company can not find a replacement to sell their turbines to but Russia can find another manufacturer elsewhere.

"Export explosions"?  Dude, did you understand anything about the quote in the OP?  I don't think there's a language misinterpretation on your part; I think you're just shitposting.

This thread was from May, and I haven't been keeping up with what's going on between Russia and Ukraine, but by no means have I heard any horror stories about famine in Russia (and someone please correct me if I'm wrong, and I'll admit I haven't read all the posts in this thread), so I don't think their economy imploded.

I also agree with those who said the article was a political one more so than a typical academic economics piece.  Whether there was a Polish author or not, it's hard to keep personal worldviews out of an article like this one.  Not impossible, though.

War certainly makes a direct impact on the economic sector, and if there are reports that say export explosions occur then it is reasonable, but I'm sure market law will always work so that a country that is very dependent on Russia will continue to buy and not care about the embargo or economy sanction.

Thanks, very informative. I have read the original report and I can say that this study (and especially the conclusions from it) are highly politicized. Indeed, Russia has difficulties with the size of the positive balance of payments, but I would not dramatize this situation. After all, if your balance has become sharply positive, then someone's balance has become sharply negative. And if you have a large surplus of energy resources, then someone else has an equally large deficit. And this is a really serious problem.

However, I see three Polish names among the authors of the report, and Poland is traditionally at the forefront of European Russophobia.

Yes Russia is loosing steam. It certainly has became a pariah in international stage. However implosion is overstatement. In a lot many ways Russia is too big to ignore. Many countries are dependent on it and this economic condemnation can't sustain long. See along with Russia, Europe is also facing tough time, their gas prices are too high and they will need Russian gas in future, so they will probably resume trade with Russia in future.

The Chinese officials have a reputation as tough negotiators (similar to Turkey). They will never pay the same price that the Europeans pay to Russia. But at this point, I don't think that Russians care a lot about their profit margins. As long as they are able to sell their gas at decent prices to China, they will be happy. Japan and South Korea would have been more attractive options. But the close relationship these two countries have with NATO, I don't think that Russian gas will find any new markets there.

It's not such a big surprise that the sanctions have an effect. I know it was hard not to buy the Russian propaganda at the start that was telling us how sanctions won't have an effect on them, but they do, they can't escape that, especially the export part of it. They will try to find a home for their gas export, and China is a really good option, but I am not sure how much will China be able to take in and when the pipelines needed to transport will be finished.

At your request, I provide links to several articles with the abstracts of the Yale University report and to the report itself:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4167193
https://topcor.ru/27313-britanskij-zhurnalist-mjetjuz-razvorot-rossii-k-kitaju-ne-imeet-smysla.html
https://ecodefense.ru/2022/08/05/sanctions-are-crippling-russian-economy/
https://forbes.ua/ru/inside/devyat-mifiv-pro-vidnovlennya-rosiyskoi-ekonomiki-popri-zayavi-kremlya-sanktsii-pratsyuyut-ale-ikh-potribno-bilshe-the-economist-26072022-7353

Agreed on each and every point. Back in 2014, the Russian government decided to convert some of their forex reserves to gold and CNY. But even in 2022, more than half of their reserves were either in EUR or USD and this enabled the western nations to freeze all those funds. I don't know how much the western economies will get impacted in the end, but it is not going to be one-sided. So far the media has focused on the economic hardship within Russia, such as weakening Ruble and unemployment. But the real impact in Western economies will be revealed by the end of this year when they will import LNG at sky high rates from Qatar and the US.

European and Western countries have dragged out a series of sanctions against Russia, but Russia's oil and gas exports are far greater than its imports, and sanctions cannot weaken Russia's economy.

Any country that relies only on one side is doomed from the start. There needs to be a balance in relationships. Like an investment, countries need to diversify. It means for example importing everything from the West and relying fully on the west was already idiotic. Similarly if this "pivot" is fully to the East, it is equally idiotic.

On the other hand if Russia starts selling gas to EU at realistic prices (instead of the super cheap prices like past years) while exporting it to elsewhere (China, India, Eastern Asia, etc.), stops relying fully only on imports from EU and US (eg. gas turbines from Iran at a better quality and cheaper price), kicks foreign companies out that they don't need (like McDonald's!!!), starts diversifying their foreign investors, ... then it is a good decision and makes both economical and practical sense.

If the Yale University report is saying otherwise it is either propaganda or you have to doubt their credibility.

Of course the transition comes at a cost specially when it is accompanied by armed conflict but what's interesting is that so far EU and US economies are more affected by it than the Russian economy!

Can you provide a link to the source so that I can read the report in the original (and so that the Autobot does not ban you for plagiarism)?

According to a Yale University study, the withdrawal of more than 1,000 international companies from the Russian Federation after Putin's invasion of Ukraine will affect 40% of the country's GDP. The collapse of imports devastated its foreign technology-dependent automotive, aviation and defense industries. Russia's gross domestic value added fell by 62% in the construction sector, by 55% in agriculture and by 25% in industry. Since the beginning of the war in Ukraine, the foreign exchange reserves of the Russian Federation have decreased by $75 billion.
The authors of the Yale report note that Putin's plans to pivot to the East make neither economic nor practical sense. In 2021, Russia exported only 16.5 billion cubic meters of gas to China, compared to 170 billion cubic meters to Europe. Now Russia's westernmost gas field, Chayanda, connected to China via the Power of Siberia 1 pipeline, has a maximum projected annual capacity of just 25 billion cubic meters - "and that only by 2025." "Other gas fields, in particular Sakhalin and Khabarovsk, should be connected to the Power of Siberia. But even when the entire Far Eastern gas network is completed, its throughput will still not reach the capacity of one of the Russian gas pipelines to Europe - Nord Stream - 1" (55 billion cubic meters)," the authors note.

At the same time, the announced Power of Siberia 2 pipeline with a capacity of 50 billion cubic meters per year, which should connect the Yamal Peninsula in the Arctic with China, remains a plan on paper. Gazprom, being cut off by sanctions from attracting international finance and buying Western equipment, cannot finance this project. Therefore, in fact, everything is very bad in Russia.

It seems like Putin has done all necessary homework before this attack. See who is suffering most, IMO EU and ukarine. While Russia has found new oil importers like China and even gulf countries are importing Russian oil. USA is also one of biggest beneficiary of this conflict as dollar is sky high.

Boris Johnson was forced to resign due to his accusations of domestic actions, not state affairs. Now in the election of the Prime Minister of Great Britain, the current British Foreign Secretary Liz Truss, who claims to be the Prime Minister of the country and the leader of the Conservative Party, is leading.
Recently, she has received the support of her former main rival Penny Mordaunt.
Junior Commerce Secretary Penny Mordaunt was the latest candidate to be eliminated in a vote by lawmakers from the ruling Conservative Party, losing to Truss by just eight votes. As noted, Mordaunt joined other ministers who have backed Truss in recent days, including Defense Secretary Ben Wallace and Treasury Secretary Nadhim Zahavi.

So far Truss is the favorite in this election. The leader of the 160,000 members of the Conservative Party was supposed to be elected by September 5, but the election was postponed due to the threat of interference in the elections by the hackers. I think that Liz Truss will become the new prime minister and Johnson's old policy will continue.

I respect your opinion as the author of the coolest jokes about the "greatness of Russia" and the "collapse of the world economy"

In the meantime, a few facts about "great Russia" - look what a lovely piece of news. Russia has success everywhere!
Moscow. August 1. INTERFAX.RU - The Bank of Russia estimated the fall of the Russian economy in the second quarter of 2022 at 4.3%, in the third quarter the decline is estimated at 7%. Such data are contained in the July report on monetary policy.
The Ministry of Economic Development previously estimated the decline in Russia's GDP in the second quarter at 4%.
Annual inflation in the third quarter, according to the Central Bank, will be 14.5%.
https://www.interfax.ru/business/854794

And now a nuance: Russia is a country of total lies (this is part of the culture), and if they officially write something, then it must be multiplied by at least 2 if it is about some kind of shortcomings. As, however, and divide by 10 if they say (read - lie), about success

I read your posts like a humorous magazine. Summary: Russia is falling apart, children are drowning in toilets, grandmothers are praying for Putin, and the Buryats are running out.

You can now say anything. But the fact remains that oil is getting cheaper, Russia is rapidly losing high-priced markets, and the European hydrocarbon market is falling out of Russia's hands. India and China will not help in any way, because. redeem the surplus at a dumping price ...

Here, for example, is a real fact - Russia began to stupidly burn gas, which they decided to undersupply to the EU, as part of economic terrorism Idiot terrorists understand that conservation will mean the destruction of the well, because Russia is a technologically backward country, and without Western technologies it will not reopen wells

The EU ban on Russian crude is still 4 months away. I don't see any oversupply of Russian crude before that date. For the month of July, Netherlands and a few other European countries have increased their intake of Russian crude. The Indian and Russian refineries (such as IOC and Sinopec) are complaining that the discounts are not very attractive. And I don't think that the revenues from natural gas sales are down by a lot. Yamal LNG is still able to sell their cargoes at ultra-high prices. Russian gas is still flowing through the Ukrainian route, and Nord Stream is operating at 20% capacity. All this, while natural gas is trading at close to $2,300 per thousand cubic meters at Dutch TTF.

Therefore, it is worth expressing doubts when there will be official data (as confirmation of doubts), and now these are just fantasies, due to lack of information

Regarding the reduction of discounts - no, there won't be, because soon the EU will completely abandon everything except pipeline oil (and then from it), which will lead to an oversupply of Russian oil. The market regulates this only by lowering the price from the "limited supplier". Russia has already reduced gas production, and has already begun to lose huge amounts of money. But a month ago they were screaming like that - "without us, you will all freeze!" and "you have nowhere to take gas except from Russia", they are funny, right!?