Home  Journals  Finance and Credit  2(830) - 2023 February

Are western sanctions so terrible and how to contain their impact on the economy and population of Russia?

Received: 7 November 2022

Received in revised form: 16 December 2022

Accepted: 9 January 2023

Available online: 28 February 2023

Subject Heading: MONETARY ACCOMMODATION

JEL Classification: A13, A14, D03, E03

Pages: 337–364

https://doi.org/10.24891/fc.29.2.337

Subject. The article considers the impact of US and Western sanctions on the economy and citizens of the Russian Federation after the start of the special military operation in Ukraine.
Objectives. Our aim is to analyze the impact of sanctions on the Russian economy and its financial system, to identify economic determinants enabling to restrain this impact.
Methods. The study draws on methods of scientific and information base, synthesis, grouping of obtained data. The methodological and theoretical basis consists of works of domestic and foreign scientists on the impact of economic sanctions on the development of individual countries and the world economy.
Results. The study shows that the Russian economy has proved to be much more resilient to the impact of sanctions. The sustainability of Russia's economic system rests on four main factors: (1) sales of our export goods, due to price hikes and the absence of a complete embargo; (2) sustainable domestic consumption through extensive support to businesses and citizens, and tightening the State regulation; (3) structure and composition of GDP (the real sector of the Russian economy in GDP is almost 38%); (4) preservation and expansion of friendly relations with major powers that refused to join the restrictive measures of Western countries.
Conclusions. The Bank of Russia should stimulate the country's economy, annually increase the amount of money supply, reduce the key rate up to 3% per annum by the end of 2023. This will increase investments in the economy and provide annual GDP growth.

Keywords: sanctions, key rate, inflation, ruble, exchange rate, GDP

References:

1. Aganbegyan A.G. [Russia’s future mostly depends on development of domestic financial system]. Nauchnye trudy Vol'nogo ekonomicheskogo obshchestva Rossii = Scientific Works of the Free Economic Society of Russia, 2019, vol. 215, no. 1, pp. 170–194. URL: Link (In Russ.)
2. Evsin M.Yu. [The impact assessment of sanctions on the Russian financial market]. EFO: Ekonomika. Finansy. Obshchestvo, 2022, no. 2, pp. 14–21. (In Russ.) URL: Link
3. Glaz'ev S.Yu. [Problems and prospects of the Russian financial market in the context of structural changes in the world economy]. Finansy: teoriya i praktika = Finance: Theory and Practice, 2020, vol. 24, no. 3, pp. 6–29. URL: Link (In Russ.)
4. Klinova M.V., Sidorova E.A. [Economic sanctions and EU–Russia economic relations]. Voprosy Ekonomiki, 2014, no. 12, pp. 67–79. (In Russ.) URL: Link
5. Aidiev E.A. [Sanctions and their impact on the Russian economy]. Ekonomika i predprinimatel'stvo = Journal of Economy and Entrepreneurship, 2022, no. 3, pp. 40–44. (In Russ.)
6. Shevtsova E.S. [Anti-Russian sanctions: Causes and consequences]. Nauchnye Zapiski OrelGIET, 2022, no. 1, pp. 33–37. (In Russ.)
7. Industriev M.A., Tumanyan Yu.R. [Economic sanctions against Russia: Benefits and costs]. Vektor ekonomiki, 2022, no. 4. (In Russ.) URL: Link
8. Glaz'ev S.Yu. Ekonomika budushchego. Est' li u Rossii shans? [Economics of the future. Does Russia have a chance?]. Moscow, Knizhnyi mir Publ., 2017, 634 p.
9. Nureev R.M., Busygin E.G. [Economic sanctions of the West and Russian anti-sanctions: Success or failure?]. Zhurnal institutsionnykh issledovanii = Journal of Institutional Studies, 2016, vol. 8, no. 4, pp. 6–27. URL: Link (In Russ.)
10. Filippova I.A., Krasil'nikova E.E. [Negative consequences of economic sanctions: The boomerang effect]. Natsional'nye interesy: prioritety i bezopasnost' = National Interests: Priorities and Security, 2016, vol. 12, no. 5, pp. 104–110. URL: Link (In Russ.)
11. Gun'kov Ya.V., Kostina O.I. [The financial market of Russia in conditions of modern economic sanctions]. Nauchnyi lider = Scientific Leader, 2022, no. 22. (In Russ.) URL: Link
12. Lukashin Yu.P., Rakhlina L.I. [Prospects for the development of the Russian economy in the context of sanctions]. Vestnik MIRBIS, 2020, no. 1, pp. 6–22. URL: Link (In Russ.)
13. Dzagoeva M.R., Kaitmazov V.A., Ikoev S.K. [Effectt of sanctions on the financial sector of the Russian Federation]. Fundamental'nye issledovaniya = Fundamental Research, 2015, no. 2-26, pp. 5860–5863. URL: Link (In Russ.)
14. Klinova M.V., Sidorova E.A. [Economic sanctions of the West against Russia: Development of the situation]. Problemy prognozirovaniya = Problems of Forecasting, 2019, no. 3, pp. 159–170. URL: Link (In Russ.)

View all articles of issue

ISSN 2311-8709 (Online)
ISSN 2071-4688 (Print)

Journal current issue

Vol. 30, Iss. 3 March 2024

Archive