Outspoken Russian Oligarch alleges that the country may run out of cash in 2024
Russian Oligarch, Oleg Deripaska alleges that the country may run out of cash in 2024 over the war in Ukraine
Russian Oligarch, Oleg Deripaska alleges that the country may run out of cash in 2024 over the war in Ukraine.
Russia could find itself with no money as soon as next year and needs foreign investment, outspoken Russian oligarch Oleg Deripaska has said.
“There will be no money already next year, we need foreign investors,” he said at an economic conference in Siberia Thursday, according to comments reported by TASS, a Russian state-owned news agency.
The billionaire’s comments contrast with President Vladimir Putin’s more bullish assessment of Russia’s economic prospects last week. The billionaire called for an end to Moscow’s war in Ukraine in the early stages of the conflict last year.
Putin commended the country’s economy for holding up against the unprecedented Western sanctions imposed during the previous year.
According to a preliminary assessment from the government, Russia’s economic production decreased by 2.1% last year compared to what many economists had previously projected, the recession was more mild.
Nevertheless, fissures are already visible—Russia is reducing oil production this month—and Western penalties may become more severe. The future of Russia’s economy ultimately depends on what occurs in Ukraine.
Foreign investors, especially from “friendly” countries, also have a big role to play, Deripaska said. Whether they will come depends on whether Russia can create the right conditions and make its markets attractive, he was quoted as saying.
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In a bid to starve Russia of funds for its aggression, Western countries have announced more than 11,300 sanctions since the February 2022 invasion and frozen some $300 billion of Russia’s foreign reserves.
But China has thrown the Kremlin an economic lifeline by buying Russian energy, replacing Western suppliers of machinery and base metals among other products, and providing an alternative to the US dollar.
Still, Moscow has a steep hill to climb to replace revenues lost as a result of sanctions, not least from exports.
Data released Friday showed that the European Union’s imports from Russia fell by 51% in value between February and December last year.
The bloc was one of its main trading partners for Russia before the invasion of Ukraine, with 38% of Russia’s exports going to the European Union in 2020.
The Russian government’s revenue plunged 35% in January compared with a year ago, while expenditures jumped 59%, leading to a budget deficit of about 1,761 billion rubles ($23.3 billion).
Deripaska made his fortune in the aluminum business during the chaotic scramble for assets following the collapse of the Soviet Union.
In 2018, he was sanctioned by the United States, which noted that the oligarch “does not separate himself from the Russian state.” Last year, he was indicted for allegedly violating US sanctions.
Forbes estimates Deripaska’s current net worth at just under $3 billion.
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