On 15th, the European Council approved the ninth round of sanctions against Russia proposed by the European Commission. On the same day, the US government also announced a new round of sanctions against individuals and entities in Russia. Since Russia launched a special military action against Ukraine on February 24 this year, the West has taken several rounds of sanctions to try to crush Russia economically. The escalation of the Ukrainian crisis and the subsequent seesaw continuation have impacted the Russian-Ukrainian economy and people's livelihood and profoundly affected the global economic recovery.
sanctions hit but failed to crush the Russian economy
Since the escalation of the Ukrainian crisis, the West has imposed several rounds of sanctions on Russia, involving finance, trade, energy and other fields, resulting in drastic fluctuations in the Russian financial market, rapid devaluation of the ruble, rising prices and intensified instability of the supply chain. However, with the Russian side taking a series of countermeasures, the Russian economy is generally stable.
Russian President Vladimir Putin said in a video conference on December 15th that with the concerted efforts of the Russian government, financial institutions and local governments, the Russian economic situation has been restored to stability. Putin said: "Western countries try to push Russia to the edge of world development through sanctions, but Russia will never take the road of self-isolation." Russian foreign trade and investment are shifting to dynamic developing countries, regions and markets.
Putin said that although the Russian economy is facing a contraction this year, the decline is far lower than the 2% predicted by some experts. Russia's GDP will fall by about 2.5% in 222, narrowing again from the previous forecast of 2.9%. The price level in Russia has remained relatively stable since May, after a large increase from March to April. At present, Russia's public finances remain stable. It is predicted that the budget deficit of Russia will remain at a low level this year and in the next few years, accounting for about 2% of GDP.
On December 1th, people walked in the snow in Moscow, Russia. Xinhua News Agency (photo by Alexander)
Analysts believe that after a series of shocks, such as the sharp shock of the ruble at the beginning of the year and the massive withdrawal of western enterprises from the Russian market, Russia has stabilized its domestic financial system and economic order in a short time by relying on macro-control policies. In addition, due to the short-term dependence of European countries on Russian energy and other commodities and Russia's increased exports to Asia and Africa, Russia still gains something in international trade.
In the World Economic Outlook Report released in October this year, the International Monetary Fund pointed out that thanks to the relatively stable oil export and domestic demand, Russia's economic contraction was not as serious as expected.
Professor Krudykov of tsiolkovsky State University in Kaluga, Russia, believes that one of the main goals of western sanctions against Russia is to cut off Russia's income from the energy (mainly oil and natural gas) market. However, as a result, commodity prices in the energy market have risen even more, and Russia's energy export income has also increased accordingly.
Ukraine encounters economic and people's livelihood difficulties
In contrast, since the escalation of the Ukrainian crisis, Ukraine's economy has been hit hard and people's livelihood difficulties have intensified.
On June 2th, local residents in Donetsk evacuated from damaged buildings. Xinhua News Agency (photo by Victor)
On the one hand, Ukraine's economy will fall into a serious recession in 222. Ukraine's First Deputy Prime Minister and Minister of Economy Sveritenko said at a news conference a few days ago that due to the destruction of power grid infrastructure, Ukraine's Ministry of Economic Affairs predicted that the country's GDP would drop by 32% to 33.5% in 222. The report released by the World Bank in October pointed out that the conflict between Russia and Ukraine destroyed many factories and farmland in Ukraine. It is estimated that the reconstruction work will require at least $349 billion, equivalent to 1.5 times of Ukraine's total economic output in 221.
on the other hand, the Ukrainian government's debt is rising. Geithmann Tsev, chairman of the Finance, Taxation and Customs Policy Committee of the Verkhovna Rada (Parliament) of Ukraine, said at the end of November that by the end of October this year, the debt of the Ukrainian government had reached US$ 13.1 billion. Re-borrowing to fill the budget deficit is the main reason for the expansion of Ukrainian government debt. According to reports, the Ukrainian government had expected that at least $55 billion in foreign aid would be needed in 223 to cover basic expenses. Washington post reported a few days ago that Ukraine
This is the joint coordination center for grain transportation in the Black Sea, which was filmed in Istanbul on July 27th. Xinhua News Agency reporter Shadati photo
First of all, global food and energy security has been seriously affected. Malpas, President of the World Bank, said that the Ukrainian crisis and western sanctions led to the shortage of food, energy and fertilizer, which triggered a food security crisis, and the poorest people suffered the most. In Europe, due to the tight energy supply, natural gas prices in many places have hit record highs, which has aggravated inflationary pressure and increased the burden on people's livelihood. According to the new data from Eurostat, the energy and food prices in the euro zone continued to soar, and the inflation rate reached 1.7% at an annual rate in October, hitting a new record high. According to the economic forecast report for autumn 222 released by the European Commission recently, the economies of the EU, the Eurozone and most member countries are expected to fall into recession in the fourth quarter of this year, and economic activities will continue to shrink in the first quarter of next year.
secondly, the global economic recovery has been dragged down by factors such as blocked supply chain. The Ukrainian crisis and the escalating Western sanctions against Russia have led to port congestion and airspace closure, which has continuously increased the pressure on maritime, air and land transportation, and the shortage of auto parts, semiconductors, food and energy industries that have long relied on cross-border transportation has continued to intensify. China's Deputy Permanent Representative to the United Nations, Geng Shuang, said in the Security Council's deliberation on Ukrainian humanitarian issues on December 6 that the current food and energy crisis facing the world is not a problem of production and demand, but a problem with the supply chain, and international cooperation has been disturbed.
This is the White House photographed in Washington, D.C., on August 16th. Xinhua News Agency reporter Liu Jie photo
While the global economic recovery is deeply affected by the Ukrainian crisis, the United States is the biggest beneficiary of this crisis. According to the Yahoo News website of the United States, since the escalation of the Ukrainian crisis in February, EU countries have promised to buy weapons and equipment worth about 23 billion US dollars. Since American arms dealers are major suppliers in Europe, they will get the largest share of these orders; When Europe was deeply involved in the energy crisis, the United States took advantage of the fire to seize the European energy market and sell it at a high price. According to the data of Luft, a financial information service provider, nearly 7% of the LNG loaded by American cargo ships leaving Hong Kong in September was shipped to Europe. According to many European media reports, American companies can earn more than $1 million in profits per LNG carrier bound for Europe.
The analysis believes that the global economic recovery is already faced with many uncertainties brought by regional imbalance, uncoordinated policies and repeated epidemics. The Ukrainian crisis and western sanctions against Russia have disrupted the global supply chain and seriously affected the normal operation of global trade. In addition, under the pressure of high inflation, the United States and other economies continue to tighten monetary policy, which will lead to an increase in the risk of debt default in some countries and make the world economic recovery face more risks.