Russia could run out of cash as early as next year and needs foreign investment, said Russian oligarch Oleg Deripaska.
“There will be no money already next year, we need foreign investors,” he said at an economic conference in Siberia on Thursday, according to comments reported by TASS, a Russian state news agency.
The remarks by the billionaire – who called for an end to Moscow’s war in Ukraine in the early days of last year’s conflict – contrast with a more optimistic assessment of Russia’s economic situation made by President Vladimir Putin last week.
Putin praised the resilience of the country’s economy in the face of unprecedented Western sanctions imposed last year.
Russia’s economic output shrank by 2.1% last year, according to a preliminary government estimate. The contraction was more limited than many economists initially predicted.
But the cracks are starting to show – Russia is cutting oil production this month – and Western sanctions could escalate further. Ultimately, Russia’s economic prospects depend on what happens in Ukraine.
Foreign investors, especially from “friendly” countries, also have a big role to play, Deripaska said. Whether they will come depends on whether Russia can create the right conditions and make its markets attractive, he said.
In an attempt to deprive Russia of funds for its aggression, Western countries have announced more than 11,300 sanctions since the February 2022 invasion and froze an estimated $300 billion of Russia’s foreign reserves.
But China has given the Kremlin an economic lifeline by buying Russian energy, replacing Western suppliers of machinery and base metals, among other products, and providing an alternative to the US dollar.
Still, Moscow has a steep climb to replace revenue lost as a result of sanctions, particularly from exports.
Data released this Friday (3) showed that European Union imports from Russia fell 51% in value between February and December last year.
The bloc was one of Russia’s top trading partners before the Ukraine invasion, with 38% of Russia’s exports going to the European Union in 2020.
Russian government revenue fell 35% in January compared to a year earlier, while spending rose 59%, leading to a budget deficit of around 1.761 billion rubles ($23.3 billion).
— Anna Chernova contributed reporting.
Source: CNN Brasil
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