Is Putin broke? Sergei Guriyev on Russia’s budget

Berlin Russian President Vladimir Putin has put the economy in an “unprecedentedly bad situation”: This is the conclusion reached by the renowned Russian economist Sergei Gurijew, former chief economist at the EBRD, the development bank for Eastern Europe. “Despite the high oil prices, the country is stuck in a recession,” he says.

The war and Western sanctions have brought Russia deep into crisis, explains the current pro-rector of the Parisian elite university Sciences Po. Instead of the three percent economic growth expected at the beginning of the year, gross domestic product (GDP) is likely to fall by six percent. He sees an “enormous decline in the Russian economy”.

In March, immediately after the introduction of sanctions as a result of the Russian invasion of Ukraine, there was “blatant panic” in Russia. However, Moscow’s central bank managed to take decisive countermeasures. The main reason why Russia’s economy was able to recover somewhat at the time was that only the USA, not the EU, had imposed tough sanctions on the purchase of Russian energy sources.