The Central Bank of Russia raised its key lending rate by one percentage point to 13% on Friday, a month after imposing an even larger hike.
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00:00 Vladimir Putin insists the Russian economy is stable and reliable, despite Western sanctions,
00:06 high inflation and the weak ruble.
00:09 On Friday, the Central Bank raised interest rates to 13 percent, and economists warn there
00:14 are fundamental problems lurking below the surface.
00:17 "The Russian economy is working to the limit, to the absolute limit of its capabilities,
00:26 and this can be checked primarily by the fact that it is unemployed.
00:32 It is at historically low levels, which means that there is literally no one to work in the country.
00:38 And when there is no one to work, it means that the production capacity is overloaded
00:42 to the point where it is impossible to work.
00:45 Therefore, the Russian economy is trying to overcome the pressure it has faced
00:52 after Vladimir Putin decided to trade with Ukraine."
00:56 Economists are also concerned about inflation forecasts,
01:00 which look unreasonably optimistic, and the income situation.
01:04 With the sanctions, the massive revenues from oil and gas have declined.
01:08 "I think it will be worse, because, first of all, we can see from the trade balance
01:16 that export revenues are seriously declining.
01:23 Export revenues from oil sales are our main source of income,
01:35 and these revenues have already decreased by about 40-45 percent.
01:42 And it looks like this trend will continue."
01:49 Imports are a problem too.
01:51 Last month, the weak ruble fell to 100 against the dollar for the first time,
01:55 meaning imports are now more expensive.
01:58 And yet the Russian government recently improved its forecasts for economic growth for 2023 to 2.8 percent.
02:05 (car honking)
02:07 [SWOOSH]