White House Claps Back at Putin
After Russian President Vladimir Putin criticized the US for being willing to do whatever it takes to preserve its “global dictatorship,” the White House clapped back.
In a speech at the Eastern Economic Forum in Vladivostok, Putin claimed international sanctions imposed on his country after its invasion of Ukraine were a global “danger.” He added the US was ready to sacrifice Europe, which was experiencing a crisis in the cost of living. Energy prices in Europe are skyrocketing as the war rages on.
Sanctions are causing economic pain
Putin spoke out against the West collectively, but put the blame for economic sanctions on the US. They are causing pain to Russia and Europe as food and energy costs rise worldwide.
Russia paying “heavy price”
The West generally condemns Russia for its ceaseless war on Ukraine. The White House defended its stance toward Russia. A US State Department spokesperson wrote to CNBC in an email:
Despite President Putin’s comments at the Eastern Economic Forum, Russia is paying a heavy price for his full-scale war on Ukraine, which continues to result in climbing costs – tens of thousands of Russian soldiers killed, 14 million Ukrainian citizens forced to flee their homes, historic cities pounded to rubble – all because Putin is determined to conquer another country.
The spokesman added that Russia’s economy would suffer a long-term decline and was vulnerable to being cut off from the global economy. The war is likely to deplete a lot of Russia’s economic gains over the last 15 years in his opinion.
Russian govt admits economic challenges
Top Russian politicians, including the finance minister, have admitted that sanctions have inflicted serious damage on the country. The Russian government is spending increasing amounts to support its economy, noted the spokesman. According to official Russian sources, Russia’s budget deficit exceeded $15 billion in July alone.
Putin turned to China and India
To circumvent the bite of sanctions, Putin turned to China and India to sell Russian oil. Last month, Reuters reported that Russia’s economy ministry projected higher gas prices and oil export volumes to raise the country’s revenue from energy exports to $337.5 billion in 2022, up almost 40% y/y.
Russian GDP to drop by at least 2%
Yesterday, Putin commented Russia would record a budget surplus in 2022, but admitted deceleration of growth. He said the country’s gross domestic product would drop by “around 2% or a little more.”
Russian central bank predicts economic decline
Russia’s central bank’s expectations are far less optimistic. Its experts predict the economy will contract by 7% in the third quarter of 2022, following a drop of 4.3% in Q2, Reuters reported in August. In the second half of next year, Russia’s economy is expected to start recovering.
