Russian PM Admits Economy Has Suffered 'Certain Slump' From Sanctions

Russia’s Prime Minister Mikhail Mishustin admitted Monday that the country’s economy has seen a certain decline after being hit with economic sanctions over the war in Ukraine.

Speaking at the Innoprom-2022 International Industrial Exhibition in Yekaterinburg, Mishustin said some industries in Russia have seen a “certain slump,” but added that other industries, such as electronics and pharmaceuticals, are flourishing amid the sanctions from Europe and the West.

“Some of the industries are seeing a certain slump, but nowhere have we approached a critical point. Quite the contrary, we are seeing an increased growth in the electronic, the pharmaceutical, and other industries,” Mishustin was quoted as saying by oppositional Russia media Meduza.

“We’ve made good progress and in many ways this has allowed our industry to hold out [against the Western sanctions - ed.] and to avoid any sort of dramatic scenarios which our opponents forecast and expected.”

Mishustin’s remarks come days after the State Duma, also known as the Russian parliament, on July 2 introduced an amendment to federal laws that would effectively ban Russian businesses from refusing to accept government orders to support “special military operations.”

The amendment will also allow the Russian government to make changes to the contracts of employees or their working conditions. This means the Kremlin can force workers to work at night or during public holidays.

The Kremlin said the amendment was imposed after the war in Ukraine revealed a shortage of supplies, including materials needed by the military to repair their equipment.

In addition to the amendment, the Kremlin would also likely integrate the Zaporizhzhya Nuclear Power Plant in southeastern Ukraine into the Russian energy system, according to The New Voice of Ukraine.

In the weeks following the start of the invasion in February, the value of the Russian ruble fell following the sanctions levied by the U.S. and other allied nations. Many foreign multinational companies, including Ikea, Unilever, H&M, Adidas, Nike, McDonald’s and Starbucks, among others, also pulled out of the country.

However, the Russian economy has improved over recent weeks following increased oil exports to China and India, both of which have not condemned the Kremlin’s invasion of Ukraine.