Hard hit by sanctions since the February 24 invasion of Ukraine, Russia's economy will shrink by 15 per cent this year and another 3 per cent in 2023, wiping out 15 years of economic gains, according to the Institute of International Finance, a global banking trade group.
The resilience of the ruble — Russia's currency — has partially shielded its economy from the full impact of sanctions. Propping up the ruble are strong oil and natural gas sales and the Russian central bank, which has raised interest rates and imposed capital controls to keep money from fleeing the country.
President Vladimir Putin said this week that unemployment and inflation are decreasing, backing up his frequent claims that Russia is succeeding despite Western sanctions.
Still, the finance institute argued that the sanctions, partly by encouraging foreign companies to abandon Russia, “are unraveling its economy, wiping out more than a decade of economic growth, and some of the most meaningful consequences have yet to be felt.''
Meanwhile, the head of the Ukrainian grain traders group has dismissed Turkey's effort to negotiate a deal with Russia to allow Ukrainian grain exports to resume, saying Ankara lacks the power to act as a guarantor. Ukrainian Grain Union head Serhiy Ivashchenko said Wednesday that “Turkey doesn't have enough power in the Black Sea to guarantee security of cargo and Ukrainian ports.”
The blunt comment followed talks between Turkey and Russia at which they discussed creating a safe maritime corridor in the Black Sea for Ukraine to export grain amid an escalating world food crisis.
Russia says the Ukrainian ports must be demined to allow safe shipping and insists on its right to check incoming ships to make sure they don't bring weapons into Ukraine.
Ivashchenko said Ukraine would prefer if NATO ships entered the Black Sea and served as guarantors. He also said it was the Russians who have planted sea mines in the area, and it would take three to four months to remove them. In another development, Slovakia's government has approved a long-term Defense Ministry plan to modernize and significantly increase the number of troops in its armed forces following Russia's invasion of neighbouring Ukraine.
According to the plan announced Wednesday, the NATO member with a population of 5.5 million people should have 22,000 service members by 2035, up from 14,100 this year.
Slovakia also plans to acquire 228 various armed vehicles and will modernize its air force bases to be ready for the U.S. F-16 fighter jets whose delivery should start in 2024, with other deals to purchase new arms to follow.
The government has also confirmed Slovakia's commitment to spend 2 per cent of its gross domestic product on the military by 2024.
Turkish Foreign Minister Mevlut Cavusoglu says a plan by the United Nations for a grain corridor to carry Ukrainian agricultural products was “feasible.”Speaking alongside Russian Foreign Minister Sergey Lavrov at a news conference Wednesday in Ankara following talks, Cavusoglu said the plan required negotiation between Moscow and Kyiv.
There was no Ukrainian representative at the Ankara meeting. But Kyiv has expressed concerns that if it removes mines from its Black Sea ports, Russia would be more able to attack its southern coast. Cavusoglu also said Moscow's request that its involvement in implementing the U.N. Plan result in the easing of international sanctions against it was “quite legitimate.”
“If the whole world is in need of the products to be exported by Ukraine and the Russian Federation, then a method needs to be established,” he said, adding that he hoped “technical preparations” could be made “as soon as possible.”