Russia Hit Harder by Sanctions Than Expected as Putin Faces Deep Recession

Russia saw slower than predicted economic growth in the first quarter of 2022, signaling that sanctions imposed in response to its Ukraine invasion may have had a greater initial impact than expected.

A Bloomberg poll of economists found that their median forecast was for a year-over-year increase of 3.7 percent in Russia’s gross domestic product in this year’s first quarter. But Rosstat, Russia’s federal statistics service, released a preliminary assessment Wednesday that showed GDP rose 3.5 percent in the quarter, compared with the same period last year, according to Reuters.

The lower than expected GDP growth, which occurred in the first three months of the year, reflects some of the initial consequences of the sanctions imposed on Russia following the start of the Ukraine war in late February. Russia has faced increasing economic isolation following its widely condemned invasion of Ukraine. The UK’s government predicted in April that Russia was heading for its deepest recession since the collapse of the Soviet Union.

“Our unprecedented package of sanctions is hitting the elite and their families, while degrading the Russian economy on a scale Russia hasn’t seen since the fall of the Soviet Union,” UK Foreign Secretary Liz Truss said in a statement in April. She was referring to a sanctions package targeting the daughters of Russian President Vladimir Putin and Foreign Minister Sergey Lavrov.

Russia saw slower than expected economic growth in the first quarter of 2022, which was affected by imposed imposed after the invasion of Ukraine. Above, Russian President Vladimir Putin at the Collective Security Treaty Organization summit in Moscow on May 16.
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Assessments for 2022’s second quarter may provide a more accurate picture of the full impact of the sanctions on Russia, since the first quarter took only the first month of the war into account.

Western sanctions against Russia have targeted a range of figures, organizations, entities and markets. The US, for example, banned all Russian oil imports in March and even sanctioned Putin himself the day after he launched his invasion.

One of the newest sets of sanctions, announced Thursday by the UK government, takes aim at Russia’s airline sector by barring Russian airlines from selling their unused but valuable landing slots at UK airports. The move would prohibit Russia from cashing in on the slots, which have an estimated value of £50 million ($62 million).

“As long as Putin continues his barbarous assault on Ukraine, we will continue to target the Russian economy,” Truss said in a statement. “We’ve already closed our airspace to Russian airlines. Today we’re making sure they can’t cash in their lucrative landing slots at our airports. Every economic sanction reinforces our clear message to Putin—we will not stop until Ukraine prevails. “

Newsweek reached out to Russia’s Foreign Ministry for comment.

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