More evidence of sanctions working. The Bank of Russia (more on them below) just reported a significant deterioration in exports for Q2. This is primarily a reduction in O&G exports, taxes on which account for 45% of Russia's budget. Obviously the massive drop in the value of the ruble is connected. This war only becomes harder to finance for Putin with this sort of economic decline.
The article and Bank of Russia data speaks to the overall decline in surplus which is in part from an increase in exports (after the precipitous decline last year due to sanctions) but largely based on a reduction in exports. Energy exports are critical to Russia's finances and the happiness of the oligarchy (as well as Putin's bottom line since he built his estimated $200B fortune in large part on wetting his beak through the oligarchy).
To make up for this and to help fund this dumb loser of a war, Putin is
declaring a "windfall" tax which, while only raising $4B isn't well received by prosperous Russians and serves only to increase the brain drain they've suffered. The tax won't impact energy businesses and the government said it may need to be repeated to continue to finance the war.
From the Bank of Russia:
Quote:
the decline in the surplus of the balance of the external trade in goods in January June 2023 compared to the comparable period of 2022 was caused by a decrease in both the physical volumes of export deliveries and the deterioration in the price situation for the basic Russian export commodities, energy commodities made the most significant contribution to the decline in the value of exports;
As to whether you can trust BOR's data, the bank has stated t
hat it doesn't want to publish data that could increase Russia's vulnerability to sanctions risk, so I would assume that the data, if inaccurate, would tend to help not hurt Putin and Russia.
Quote:
"The lack of publicly available statistics affects the quality of analysts' and researchers' work," the bank said. "The Bank of Russia advocates restoring the publication of financial statements, except for the indicators that increase the companies' and the economy's vulnerability to sanctions risks."
Obviously, this post will be followed by the usual propaganda, but that's what ignore is for.