Can The Russian Economy Survive the Sanctions and Falling Oil Prices or will it Crash Like Soviet Union ?
Russia has drastically paid down external debt and is building formidable Gold reserves. Russia also has a reasonable trade surplus.
Russia has little external debt, decent foreign reserves for a rainy day.
Unemployment is very low, at around 5 to 6%.
Russian external debt listed in billion roubles;In equivalent US dollars, is just US$7.29 billion .
This is relatively peanuts compared to the US DEBT, for example, which approaches US$23 Trillion.
In other words, the US External debt is more than three thousand times greater than Russia’s.
Russia does have an economy of nearly $1.7 trillion, which puts it at 12th place in the world’s largest economies.
I am more reluctant to take official statistics for granted. The GDP per capita, average salary, and consumer’s basket are not good enough in presenting the real truth.
But let’s start with the official statistics. From 1999 to 2014, before the political conflict with the west started, Russia had had fascinating GDP growth, economic and social development, modernization of infrastructure, and political system. The average salary reached some 600€ per month net, which, compared to the EU, had put it in the range with the Czech Republic, Slovakia, Slovenia, Hungary, Croatia… This was not a bad result at all. Additionally to that, Russia had the lowest fuel price on the market. Particularly speaking about Moscow and St. Petersburg, two greatest and highly developed cities, economy and wealth in those were completely comparable to Western Europe, with an average salary above 1000€.
In the last five years, the Russian economy has stagnated due to sanctions and political crises. GDP has dropped for several percents, while the average personal income of families has dropped, even more, about 20%. In rural areas and in less developed towns, people work for 200–400 euros a month. Moscow is still a much better place to live, but investments have slowed down.
Russia does struggle to trade because of trade sanctions imposed by western nations in retribution for the shooting down of flight MH17, which it now appears was actually carried out by Ukraine’s 223 Straya Regiment missile battery at Zaroshchenske.
Some speculate Ukraine deliberately shot down Malaysian Airlines flight MH17 to sabotage losing revenue to Nordsream 2, which runs under the Baltic to Germany.
The United States is also desperately trying to prevent Germany from buying natural gas from Russia via the Nordsream 2 pipeline under the Baltic sea.
The United States is doing this by flooding Europe with cheap natural gas at below-market prices subsidized by US taxpayers.
Russia Warns EU Over ‘Obstacles’ In Constructing Nord Stream 2.
The object of US actions is to try and strangle Russia’s export markets.
Russia, however, has strong trade with China, Europe, India, and Iran.
But on the other hand, With the current budget deficit of roughly two trillions of rubles and no access to creditors, Russia will soon run out of reserves.
Basically, we see a repeat of the situation that lead to the collapse of the Soviet Union.
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