Bleak Assessments of Russian Financial system Contradict Putin’s Rosy Claims

Mr. Sobyanin wrote in a weblog submit that the newly unemployed can work within the metropolis’s parks, service facilities and public well being pavilions, “a chance to do helpful work and purchase new expertise.”

In an look on the decrease home of Parliament, Elvia Nabiullina, the chairwoman of the Russian Central Financial institution, gave a extra far-reaching, unfavorable evaluation. She instructed lawmakers that whereas the sanctions’ impression had largely been on the monetary markets at first, they “will now start to more and more have an effect on the true sectors of the economic system.”

For instance, she stated, “virtually each product” manufactured in Russia depends on imported parts. Factories for now should have them in inventory. However due to new Western export restrictions, Russian corporations will probably be pressured to shift their provide chains or begin making their very own parts.

“In the meanwhile, maybe this downside isn’t but so strongly felt, as a result of there are nonetheless reserves within the economic system, however we see that sanctions are being tightened nearly on daily basis,” she stated. “However the interval throughout which the economic system can reside on reserves is finite.”

Ms. Nabiullina, an internationally revered central banker who reportedly tried to resign within the days after the struggle, stated about half of the central financial institution’s $600 billion overseas forex and gold reserves remained frozen due to sanctions. These reserves that the financial institution nonetheless managed, she stated, have been primarily gold and yuan — of little use in attempting to stabilize the ruble — forcing the financial institution to resort to capital controls like limiting how a lot overseas forex will be taken in a foreign country.

In his televised videoconference later within the day with Ms. Nabiullina and several other different officers, Mr. Putin acknowledged that the Russian economic system did face some issues, together with inflation. He stated he had already directed the pensions and salaries of state staff — a part of Mr. Putin’s political base — to be adjusted for inflation and indicated that he supported higher authorities spending to stimulate the economic system.

“The price range ought to actively assist the economic system, saturate the economic system with monetary assets, and preserve its liquidity,” Mr. Putin stated. “There are alternatives for this. After all, we have to act rigorously.”