German press: Russia on the brink of bankruptcy due to sanctions on Ukraine

In Russia the Russian President Vladimir Putin has brought the economy to an “unprecedentedly bad state”, comments the financial newspaper Handelsblatt. Despite high oil prices, the country is going through a recession.

The war and Western sanctions have brought Russia into deep crisis. “Instead of the 3% economic growth expected at the beginning of the year, the Gross Domestic Product (GDP) is likely to decrease by 6%”, reports Handelsblatt.

In March, immediately after the imposition of sanctions as a result of the Russian invasion of Ukraine, there was “blatant panic” in Russia. However, Moscow’s central bank managed to take decisive countermeasures. “The main reason why Russia’s economy was able to recover somewhat at that time was that only the US, not the EU, had imposed harsh sanctions on the market for Russian energy sources.” Now that, according to the newspaper, a European oil embargo and a ban on the purchase of Russian petroleum products, Russia’s main source of income, are also to be imposed will be severely reduced.

While the public treasury of Russia is also suffering significantly. The gap created in the national budget by tax shortfalls amounts to 900 billion rubles (15.2 billion euros) in July alone and therefore 8% of the Gross Domestic Product. “If things continue like this, Putin will run out of money to pay more and more soldiers in the war in Ukraine,” predicts Handelsblatt.

DW – Efthymis Angeloudis

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