"Russian Economy May Return to Soviet Union Levels from 30 Years Ago"

[Asia Economy Reporter Bu Aeri] There is a view that the Russian economy could regress to the level of the former Soviet Union about 30 years ago. This is due to the impact of Western sanctions following the invasion of Ukraine.

On the 14th (local time), according to CNBC and others, Maximilian Hess, a Central Asia researcher at the U.S. think tank Foreign Policy Research Institute, predicted, "Over the next five years, Russians will live at the level of the 1990s or even worse."

He further evaluated that although President Vladimir Putin has kept his promise to the people to prevent them from having to live at the 1990s level, problems are arising due to the effects of sanctions.

This is because the value of the ruble fell by 40% last month due to Western sanctions, and global companies are leaving Russia. More than 300 well-known brands, including global banks such as Goldman Sachs, famous accounting firms, Starbucks, McDonald's, Ford, Shell, and Visa, have withdrawn from Russia.

The West, including the U.S., excluded major Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment network to block overseas fund transfers, froze the foreign exchange reserves of the Russian central bank to make exchange rate defense difficult, decided to stop imports of Russian crude oil and gas, and controlled exports of advanced technology products and luxury goods to Russia.

Moreover, there is a possibility of default whenever the maturity date of Russia's dollar-denominated bond interest payments, including the 16th, and future foreign currency sovereign bond maturities arrive.

This content was produced with the assistance of AI translation services.