Russia borrowed a record-breaking $56 billion in December and Putin has been forced to cut the country’s non-war spending as other domestic industries suffer.
in December, the lowest level since its initial invasion of Ukraine. However, Russia is still achieving significant earnings from its oil and gas, with revenues of around $691 million per day from exported fossil fuels, a decrease of around a third from earlier this year. The cost of the ongoing conflict in Ukraine and the knock-on economic effect of energy sanctions has led Russia to borrow money.
And it’s not only limitations on energy sales that are posing a threat to Russia’s economy in 2023, with expectations for a decrease in other exports. The country’s car sales fell by 58.8 percent in 2022, according to the Association of European Businesses , following Western sanctions on Russia. This led many Russian car manufacturers to suspend production, particularly as supply chains were heavily disrupted, reducing the availability of parts.
High oil and gas prices at the beginning of 2022 helped fund Russia’s war efforts before it felt the pinch of mounting international sanctions on Russian energy. President Putin has cut and delayed the country’s non-war spending and is considering higher taxes on larger companies to boost revenues.
While Russia’s economy remained resilient in 2022, the ongoing pressure from the West will be felt across several industries in 2023. As countries across North America and Europe wean themselves off Russian energy and other products, cutting ties with the country and causing disruptions to its supply chains, we can expect its invasion of Ukraine and subsequent responses from major world powers to have an immense impact on Russia’s economy.
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