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Russia’s economy will shrink, says Russian economist

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Russia’s economy will shrink, says Russian economist

Russlands Präsident Wladimir Putin.

ALEXEY NIKOLSKY/Sputnik/AFP via Getty Images

Economist Alexandra Prokopenko explained in an interview with Capital that the Russian economy would shrink – but that would only happen very slowly.

The Russian economy is currently stable. Prokopenko criticizes the fact that Western sanctions have done little to the country.

But stability will not last forever and the expert suspects that the quality of life in the country will decline.

The Russian economy currently remains strong. But the country will not be able to maintain this in the long term, says Alexandra Prokopenko. The visiting scholar for the Carnegie Foundation and the German Society for Foreign Policy in Berlin explains in an interview with “Capital” that the Russian economy would shrink in the future – but only very slowly.

Russia’s economy will slowly shrink

Prokopenko came to Germany from Russia after the start of the Ukraine war. The former employee of the Russian Central Bank emphasizes that Western sanctions against Russia have not really been successful. “The Russian economy has proven to be quite resilient, and the Western countries have underestimated that,” says Prokopenko in the “Capital” interview.

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She explains that the country has managed to circumvent the oil price cap. “The government in Moscow built the infrastructure within six months to undermine this instrument,” emphasizes Prokopenko. This suggests that the sanctions were poorly designed.

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In particular, Russia’s spending on the defense industry remained strong and was the reason for the economic growth. “Capital” reports that the International Monetary Fund predicts an economic rate of 2.6 percent for 2024. Prokopenko also emphasizes that “there are still Western companies that trade with Russia by conducting business through countries such as Kazakhstan, Kyrgyzstan and Turkey.”

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Nevertheless, Prokopenko believes that the Russian economy cannot remain stable in the long term. She suspects that the economy will slowly decline: “We will see that the quality of life will gradually decline.” Because companies in Russia will suffer from the import sanctions for technical goods, she predicts. It is not possible to make up for this damage in the long term. “The military can still use tricks to obtain semiconductors through convoluted routes,” adds Prokopenko in an interview with “Capital”. “But this is not an institutional solution for the entire economy.â€

md

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