Russia in turmoil as Putin warned sanctions will bite and hurt after Ukraine invasion

Ukrainian president Zelensky says Russians need to protest

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Russia’s economy is expected to face a recession deeper than the one it endured during Covid. Moscow’s economy faces chaos after the West hit Russia with huge sanctions in retaliation for the invasion of Ukraine. Economists said measures imposed on Russian banks and companies by the US, EU, UK and their allies were having a severe impact on financial markets in Moscow and would inflict more damage on Russia’s wider economy over time. Analysts at Goldman Sachs said the investment bank has cut its forecast for Russian gross domestic product (GDP) this year from 2 percent growth to a 7 percent decline.

Tougher sanctions could still be imposed if the Russian forces escalate their offensive in Ukraine.

Finland’s Ambassador to the UK, Jukka Siukosaari, tells Express.co.uk that the sanctions will “bite” and will “hurt” the Russian economy.

He said: “We think Russia has miscalculated the situation, the unity of the West has come as a surprise to them.

“The Finnish people feel very deeply about what is happening in Ukraine because we have a historical comparisons in our own past.

“There is a strong willingness amongst our population to help Ukraine where we can.

“I’d say business as well as civil society in Finland is behind the sanctions in a way that we have never seen before.

“The West’s unity has surprised Russia, the sanctions are unprecedented and they will bite. It is not only that the sanctions are hurting Russia on a national basis but also on an individual basis, so we hope that will be enough to turn their heads.”

Finland has endured many conflicts with Russia in the past.

They fought Moscow for centuries as part of the Swedish Kingdom, but also as an independent nation.

During World War 2, for example, Finland fought with the Soviet Union from 1939-1940 and 1941-1944.

In recent decades, Finland has been seen as more neutral amid tensions between the West and Russia.

However, it is closely aligned with NATO, though not a member, and also a member of the EU.

According to the US, sanctions that have already been imposed have hit 80 percent of banking assets in Russia.

Emily Kilcrease, senior fellow and director of the Energy, Economics and Security Program at the Washington think tank, the Centre for New American Security, told the BBC that the current level of sanctions “are at a seven or eight out of 10 on the escalation ladder.”

She added: “There is definitely still room to go with tightening.”

One area that could be targeted is energy.

Western leaders have been reluctant to target the sector so far as Russia is a big supplier and prices in Europe are already high.

Europe relies on Russia for roughly 40 percent of its gas imports and roughly 30 percent of its oil imports.

Christopher Miller, professor at Tufts University’s Fletcher School and an expert on the Russian economy, believes it is only a matter of time before Russian energy is targeted, however.

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He told the BBC: “My sense is that it’s going to become politically untenable to say we’ll keep paying Russia for oil, gas and coal.

“That’s already been politically tough for Western leaders to stand by and I think it’s going to become even tougher as the Russian military escalates its use of force.”

Big falls in the ruble’s value means that importing goods will become a lot more expensive, resulting in a rapid and dramatic fall in living standards.

Liam Peach, emerging markets analysts at Capital Economics, expects inflation to rise to as high as 20 percent in the country.

He added in an interview with the Independent: “You’ve got a bad combination of really high inflation and really high interest rates that will take a toll on demand in Russia.”

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