Russia’s economy is collapsing amid crippling sanctions, study says

According to a Yale University study released this month, Russia’s economy is on the brink of collapse as international sanctions kick in.

The analysis, which the authors say is based on consumer, trade and shipping data, shows an economy at risk of collapse as foreign companies leave and sanctions continue.

“What is clear from our analysis is that business pullbacks and sanctions are catastrophically crippling the Russian economy,” the authors write.

“As the Russian invasion of Ukraine enters its fifth month, a common narrative has emerged that world unity in opposing Russia has somehow turned into a war of economic attrition that is taking its toll on the West,” it said in the study reads and adds: “That’s just not true.”

The surprising performance of the ruble after unprecedented economic isolation has been attributed by some analysts to cheap commodity markets in a nation dependent on oil and gas exports.

Others have pointed to Russian President Vladimir Putin’s requirement that these goods be bought only in rubles and the central bank’s restrictions on foreign holders of Russian stocks and bonds taking dividend payments out of the country.

Russia invaded Ukraine on February 24. Alexey Maishev, Sputnik/`

However, the Yale study argues that Russia is now trading its commodities from a position of weakness and has been forced to switch from supplying most of Europe to underperforming deals in the secondary markets.

And the authors claim that Putin’s “apparently unsustainable” monetary policy has pushed the Russian government into deficit.

The study claims that nearly 40% of Russia’s gross domestic product has been lost to foreign companies withdrawing from the Russian economy, “which has reversed nearly all foreign investment in three decades.”

The Yale professors also say that domestic production of goods in Russia has all but ground to a halt, causing supply shortages and driving up consumer prices.

This has shaken confidence in the system and triggered an exodus of capital and people, the authors write.

“There is no way out of economic oblivion for Russia as long as the allied countries remain united in maintaining and increasing sanctions pressure on Russia,” the study concludes.