Since the beginning of the full-scale war of the Russian Federation against Ukraine, there have been many discussions about the consequences of economic sanctions imposed against Russia. Many commentators argue that the sanctions have only a limited or no effect, firstly because they have not forced Kremlin chief Vladimir Putin to change his policies, and secondly, because the Russian economy has shown some resilience.. However, according to Vladimir Milov, a Russian economist and economic adviser to Russian opposition leader Alexei Navalny, both statements are misleading.. The last argument about the stability of the Russian economy is based on a false approach, focused only on a few macroeconomic indicators, which are not enough to assess the real state of the Russian economy.. He stated this at the Atlantic Council conference.

According to Milov, it is very important that analysts are trying to study the impact of sanctions in more detail, to investigate what is happening with the Russian economy, the impact of sanctions on the industry, market, society of the Russian Federation, etc..

“In addition to just a set of macroeconomic indicators that can often be seen in the headlines, such as GDP, the ruble exchange rate or the unemployment rate, to determine the real effect of sanctions, it is necessary to look at more detailed data that give a clearer picture of the impact of sanctions on the Russian economy,” Milov said..

“What we see in general is that the reduction in economic activity due to sanctions is very significant.. It's about 5 to 10 percentage points year on year, no matter what you look at.. Whether it's retail trade, freight turnover, or what I think is the most important indicator, it's tax revenues from the oil and gas industry to the Russian budget.. And how it affects the economy as a whole,” he added..

The picture is bleak enough for the Russian government, analyst says..

" We heard a lot of talk about a potential recovery before the end of the year, that the biggest blow came in the second or third quarters of last year, but then the Russian economy will start to recover. But we just do not see general indicators that something like this is happening, ”he said..

One of the main indicators, due to which production in the Russian Federation is reduced, is the lack of consumer demand.. Also, investment is not coming in, and import substitution doesn't really work very well..

In addition, Russia's turn to Asia is also not very effective, since Russia has to make big discounts on oil, gas and other goods exported to Asian countries..

“The impact of sanctions on the Russian economy is great. It will likely increase significantly over time.. Therefore, the best advice for Western politicians is to develop strategic patience,” the economist added..

“The West is on the right track, but it takes time, there is a certain resistance of the Russian economy. And I think the biggest problem that is happening today is the circumvention of sanctions, the import of sanctioned goods and technologies through third countries, China, Hong Kong, Turkey and others.. Therefore, I think in 2023, probably, the focus should not only be on new sanctions, but rather on monitoring the combination of sanctions already imposed.. Because Putin was quite successful in finding ways around them,” he explained..

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Earlier, First Vice Prime Minister of Ukraine Yulia Sviridenko said that sanctions are already having a powerful effect on the Russian economy.. At the end of 2022, Russia recorded a budget deficit of 3.35 trillion rubles, or about 2.3% of GDP.

The National Welfare Fund, whose funds Russia has been using to cover the budget deficit since October, has decreased by tens of billions of US dollars: if by the end of 2021 the fund had $182.59, today it is about $148. At the same time, the trends are only getting worse, this year Russia's budget deficit is expected to be at least 6%.