### Summary
The Russian stock market's recent gains are a facade and the country's economy is in decline, according to Yale researchers. Russia's frozen foreign assets and the depreciation of the ruble have artificially inflated stock market profits. Additionally, the economy is suffering from a loss of confidence, with people and money fleeing to neighboring countries.
### Facts
- 📉 The Russian stock market's recent gains are an illusion, masking the true state of the country's struggling economy.
- 🧊 Russia has frozen inflows and outflows of foreign assets, preventing investors from cashing out and propping up the stock market.
- 💸 The depreciation of the ruble has artificially inflated the value of Russian stocks, as the country's commodities are sold in foreign currencies.
- 💼 Workers, academics, and oligarchs are leaving Russia, taking with them technical and intellectual capital essential to the country's economy.
- 💔 Trust in President Vladimir Putin and confidence in the Russian economy have eroded, leading to a lack of domestic and foreign investment.
- 🌍 Neighboring countries like Armenia, Georgia, and Kyrgyzstan have become destinations for Russian money and talent fleeing the country.
- 📉 Experts warn that Russia's economy could continue to decline and the country may even become a failed state if the costly war in Ukraine persists.
### Summary
Russia's currency, the ruble, has plunged to a 16-month low, leading to surging prices of sushi due to the country's economic challenges and rift with the West.
### Facts
- 💰 Russia's currency, the ruble, hit a 16-month low last week, as the country's current account suffers from Western sanctions.
- 🍣 Local prices of sushi in Russia are expected to surge by as much as 30% in the coming weeks due to the weakened ruble and strained relations with the West.
- 📈 Russia's official inflation rate reached a five-month high of 4.3% in July, but some economists estimate it to be over 60%.
- 🍱 Restaurateurs in Russia are already facing increased costs of sushi ingredients, such as rice, fish, and seaweed, which are imported and dependent on the dollar exchange rate.
- 💸 The embattled ruble sank past 100 to the dollar, prompting the Russian central bank to raise interest rates significantly.
- 📉 Capital outflows, reduced reliance on Russian oil by European nations, and falling export revenues have added to Russia's economic challenges.
- 🇷🇺 President Vladimir Putin held an emergency meeting to discuss measures for stabilizing the exchange rate, including export restrictions and limits on foreign currency movement.
Russian President Vladimir Putin has acknowledged the rising risks of inflation and has urged the government and central bank to keep the situation under control, as soaring prices could pose a threat to living standards and his upcoming re-election bid, while Russia's budget is also strained due to its military operation in Ukraine.
The Russian economy is facing several major issues, including a labor shortage, soaring inflation, a tumbling ruble, the risk of recession, a real estate bubble, and the nationalization of foreign businesses, which could lead to stagnation and a fall in GDP growth in the long term.
The Russian ruble's recent volatility and decline in value reveals the underlying struggle of funding the military without damaging the national currency or causing inflation, while the Kremlin's efforts to stabilize the economy in the short term may not prevent long-term economic decline and stress on the ruble.
Russia's top lenders, Sberbank and VTB, are improving their ability to convert rupees into roubles, allowing exporters to access funds that are trapped in India due to Western sanctions and the non-convertibility of the rupee.
Russia has raised its inflation forecast for 2023 and 2024, expecting a weaker rouble as the costs of the war in Ukraine increase.
The slumping Russian ruble has raised concerns of a potential exodus among Central Asian labor migrants, as their salaries decrease in value and they have less to send home to their families, exacerbating an existing labor shortage in Russia and impacting the country's long-term economic potential.
The Central Bank of Russia has raised its key lending rate to 13% in an effort to combat inflation and stabilize the struggling ruble, which has weakened significantly against the dollar due to decreased exports and increased imports. The country also faces challenges with low unemployment and a brain drain of talent to other former Soviet states. However, the Russian government remains optimistic about economic growth forecasts for 2023.
Russia's economy is facing stagnation due to poorly timed interest rate hikes and high inflation, according to economists, despite President Putin's claims that the country's financial problems are manageable.
Russia's economic resilience, fueled by demand from the global south, is surprising analysts and oligarch Oleg Deripaska, who had previously predicted Russia would run out of money next year due to sanctions.
The Russian rouble weakened past 100 to the dollar due to foreign currency outflows and a shrinking current account surplus, but recovered slightly in early trade on Tuesday.
The Russian rouble has experienced a significant decline in value this year, decreasing almost 30% against the US dollar, leading to concerns of further depreciation and economic challenges for the country.
Russia's economy is being increasingly structured around war, with nearly one-third of the country's spending next year devoted to defense, redirecting funds from sectors like health care and education; however, the economic impacts of the war, including inflation and a weakened ruble, are causing concerns for citizens and the government alike.
Russia's rouble strengthened against the US dollar after President Vladimir Putin ordered the mandatory sale of foreign currency revenues to support the currency, but experts warn that businesses should plan for a weaker rouble in the long term.
Russia's rouble strengthens as Moscow imposes capital controls to stabilize the currency, similar to measures taken after the invasion of Ukraine in 2022, but experts warn that the rouble may weaken again in the future.
A further increase in military spending in Russia is likely to lead to inflationary pressure, financial strain on Russian businesses, and a reduction in spending on education and healthcare, according to UK intelligence.
The Russian rouble surged to a six-week high against the dollar after the Bank of Russia unexpectedly raised interest rates to 15% and exporters increased foreign currency sales.
