Russia: Secretary Blinken says Russian economy is in 'deficit'
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Vladimir Putin’s Kremlin has been pushing the message that Russia’s economy is flourishing despite the West’s multiplying economic sanctions – and especially dwindling energy exports. Despite falling gas flows to the European Union, Russia’s economy appears to have held up by rising energy prices to cushion the impact. In a massive blow to Vladimir Putin’s rhetoric, US Secretary of State Antony Blinken unveiled the true economic toll the West’s economic sanctions are taking on Russia.
Speaking from the US Department of State, Secretary Blinken said: “Moscow has been cherry-picking economic data to support President Putin’s insistence that everything is fine and the Russian economy is growing strong.
“It’s simply not true.
“The Kremlin says that global businesses haven’t really pulled out of Russia. In fact, more than 1,000 foreign companies – representing assets and revenue equal to more than a third of Russia’s GDP – have stopped operations in Russia.
“Many of Russia’s best and brightest have left as well, including highly educated professionals in critical fields, like energy and technology.”
Secretary Blinken went on to debunk all the propaganda lies peddled by the Kremlin, dealing a massive blow to Vladimir Putin’s rhetoric.
He said: “They say that Russia is replacing lost imports from the West with imports from Asia. In fact, imports into Russia have dropped more than 50 percent this year, and imports from China, for example, aren’t making up the difference in quantity and quality, especially for high-end components.
“What that also means is that Russia can’t manufacture products for Russian citizens or for export and will increasingly lose markets overseas.
“They say that the government is running a budget surplus because of high energy prices. In fact, the budget is in deficit, and Russia can’t spend the oil revenues it has acquired on the imports it wants because of sanctions.”
“They say that the Kremlin has plenty of sovereign wealth. In fact, half of that money – half of that money – is frozen overseas. They say that domestic consumption is still strong in Russia. In fact, consumer spending has plummeted.
They say that the ruble is the world’s strongest performing currency. In fact, the currency market is controlled by the Kremlin, Russian households are restricted from converting rubles to dollars, the ruble is trading at a much lower volume than before the war.
“So, though the Kremlin is working hard to paint a picture of economic stability, the facts show otherwise.
“The powerful impact of sanctions will grow and compound over time.”
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The exact economic impact the Western sanctions are having on Russia’s economy is hard to determine, as Russia’s Ministry of Finance has withdrawn data on the expenditure of the Russian budget since May of this year.
However, a new study from Yale University shows that “Russian domestic production has come to a complete standstill with no capacity to replace lost businesses, products and talent.
“The hollowing out of Russia’s domestic innovation and production base has led to soaring prices and consumer angst,” the authors added.
The study added that the Kremlin’s finances are “in much, much more dire straits than conventionally understood.”
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