“Their economy is really starting to shrink,” Mark Manger, an associate professor at the Munk School of Global Affairs and Public Policy at the University of Toronto, told Global News. Russia’s gross domestic product is estimated to shrink by 15 percent by the end of the year, according to the International Institute of Economics. If the levels fall to this level, Russia will see the biggest recession since 1992, according to the World Bank. That would also be twice as severe as the 2009 recession. Here’s a look at how Western sanctions are affecting Russia’s economy.

		Read more: Russians bury relatives killed in Ukraine as Kremlin admits heavy losses

The story goes on under the ad

			Impact on manufacturing

In March, Russia’s manufacturing sector recorded the largest decline since the start of the COVID-19 epidemic in 2020, according to S&P Global. “Promoting the recession were the significant sharp cuts in production and new orders amid tacit demands from foreign and domestic customers,” the company said in a report on April 1st. Employment in the manufacturing sector “is falling at the fastest pace in almost two years” due to job cuts by companies, according to the report. Thousands of carmakers in the small Russian town of Kaluga have been fired as Western sanctions hit foreign flagships. Sanctions have exacerbated prolonged component shortages and halted production at two car factory flagships: Germany’s Volkswagen and Sweden’s Volvo. Both manufacturers have suspended operations due to the war, affecting 4,200 and 600 workers respectively. The story goes on under the ad 0:24 UN votes for Russia outside Human Rights Council citing Bucha assassination UN votes for Russia outside Human Rights Council citing Bucha assassination Ford also announced it would suspend its Russian consortium in early March. According to Munk’s Manger, Russia has also begun cannibalizing its spare planes after sanctions were imposed on their exports. “They can’t really get spare parts for them, so they have to start cannibalizing one plane to keep another flying,” he said, adding that the impact could be seen on both passenger and military aircraft. “It will be the same for almost every other technology out there. “If spare parts do not arrive, they should be content with what they have.” As the value of the ruble continues to fluctuate, some Russians have begun buying goods that may have a more stable exchange, according to Manger. The story goes on under the ad “If you have enough money, you can buy a smartphone, and if you do not have a lot of money, you can buy canned beans,” said Manger. “They will also lose their value, but not as fast as the currency.” Trending Stories

			Pierre Poilievre gathers huge crowds in the middle of the race for the leadership of the Conservative party 	   				Ukrainians begin to settle in Canada as Russia’s war continues: “More comfortable here” 	     



		Read more: Russia’s war in Ukraine sends food prices soaring to record highs

Between February 23 and March 4, the value of the Russian currency rose from 80.95 rubles to 108.19 rubles per US dollar as a result of international sanctions imposed after the invasion, according to S&P Global. Some Russian banks have also been cut off from the SWIFT interbank payment system, the world’s largest international payment network. But even as the West imposes more sanctions, Russia’s central bank has managed to stabilize key aspects of the economy with tight controls, artificially backing the ruble so that it can recover to pre-invasion levels in Ukraine. Russia’s central bank said on Friday it was lowering its key interest rate and said more cuts could be made. However, despite the ruble’s recovery, there is no real market for it as it continues to face sanctions, Manger said.

		Read more: Ruble recovers despite Western sanctions as Russia cuts interest rates

The story goes on under the ad S&P Global downgraded its rating on Russia’s ability to repay its foreign debt, raising the possibility that Moscow will soon default on foreign loans for the first time in more than a century. The credit rating agency issued the “selective bankruptcy” downgrade late Friday, after Russia arranged to make foreign currency payments in rubles on Monday, when they expire in dollars. He said he did not expect Russia to convert the rubles into dollars within the 30-day grace period. The S&P said in a statement that its decision was based in part on the view that sanctions on Russia for its invasion of Ukraine “are likely to increase further in the coming weeks, hampering Russia’s willingness and technical capacity to comply.” and the terms of its obligations. to foreign debtors “. Despite the fact that Moscow tells citizens that there is no shortage of food and urges them not to panic to buy basic items such as sugar and buckwheat, some Russian cities have begun to sell products. The story goes on under the ad Note “It is important to have enough goods for everyone. We are forced to impose temporary restrictions on high-demand products. Up to ten items per purchase “is written on a shelf of the Lenta store, a grocery store. Photo by Igor Russak / image alliance via Getty Images In the Russian city of Pokrov, sugar has been depleted in many stores and residents expect some goods to become inaccessible as Western sanctions on Moscow’s military intervention in Ukraine prevail, according to a Reuters report. “It is becoming more and more difficult for Russia to import things and that leads to these empty shelves,” Manger said. Many products have left the country as North American and European countries withdrew shares and brands, including Starbucks and McDonald’s, have also left. “Branded products will be increasingly difficult to find,” Adam Pankratz, a lecturer at the Sauder School of Business at the University of British Columbia, told Global News. “When you add aggression and war, things get worse. You will see photos from empty supermarket shelves and products that are missing in the stores “. The story goes on under the ad 2:05 Ukrainian Foreign Minister warns that the battle of Donbas will remind the world of World War II Crude oil, refined oil and petroleum gas are Russia’s top exports, according to the Observatory of Economic Complexity (OEC). “The big elephant in the room is that Canada and the United States immediately imposed an embargo on Russian oil, but the rest of the world has not,” Manger said. The story goes on under the ad “People may say, ‘They can easily send it elsewhere,’ but in reality it is not that easy,” he said, noting that Russia’s oil is already being traded at a 20% discount.

		Read more: Ukraine and allies accuse Russia of bombing Kramatorsk train station that killed 52 people

Because Russian oil is heavy crude, it is only useful for certain refineries, according to Manger. In addition, some countries may be reluctant to buy Russian oil for fear of being targeted by Western sanctions. Despite the sanctions, however, some countries around the world continued to buy Russian oil. “Russia sells at a discount, but sells in India and China,” Pankratz said. “It comes from Russia because they buy it at a discount because the Russians can not sell it elsewhere. “The reality is that the world still needs oil.” With files from the Associated Press and Reuters © 2022 Global News, part of Corus Entertainment Inc.