Russian Central Bank: "Putin's Mobilization Order Hits Russian Economy"

Russian President Vladimir Putin. (Photo by AFP)

[Asia Economy Reporter Yujin Cho] The Central Bank of Russia has published a report stating that the partial mobilization order issued by Russian President Vladimir Putin is damaging consumer sentiment and business activities, which will place a burden on the Russian economy going forward.

According to Bloomberg News on the 19th (local time), the report diagnosed that "the recovery trend in economic activity stopped in September and began to deteriorate."

It explained that more than 350,000 people have fled Russia to avoid the partial mobilization order, issued for the first time since World War II, which has already worsened the severe labor shortage and negatively affected consumer and business sentiment.

In particular, it assessed that "the reduction in the workforce following the mobilization order makes it difficult for companies to solve problems aimed at alleviating supply-side constraints and may restrict the overall trend of economic activity in the coming months."

The report explained, "In a situation where uncertainty is increasing, the contraction of consumer sentiment may temporarily delay consumption recovery."

The report analyzed that since the start of the Ukraine war in February, the departure of foreign companies from Russia has caused shortages of major consumer goods, which has also triggered inflationary pressures.

However, Bloomberg noted that this report was created by the research department and that such reports do not necessarily reflect the official stance of the Central Bank of Russia.

Bloomberg also reported that the Central Bank of Russia is expected to present a revised economic growth forecast for this year at the base interest rate decision meeting scheduled for next week.

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