Russian economy imploding

 From Business Insider

Russia's economy is collapsing as exports to the sanctioned country plummet in the face of President Vladimir Putin's ongoing, unprovoked war in Ukraine, trade experts suggest.

The "economy is imploding. We forecast a GDP collapse of -30% by end-2022," Robin Brooks, the chief economist at the Institute of International Finance trade group, tweeted on Sunday.

Brooks added that data compiled with help from Jonathan Pingle, an IIF researcher, indicated that exports from 20 countries to Russia were down 50% in April compared to the same time a year prior.

But monthly exports from Russia to other countries were up 64% in April compared to the same time a year prior, Brooks said on Monday, as oil and gas sales become a bigger part of Moscow's revenue.

Brooks said the country's account surpluses were "massive," which meant Russia was exporting far more than it was importing.

Russia stopped publishing its trade data after invading Ukraine in late February, so Brooks said the data was compiled using 20 of the country's top trading partners.

The Observatory of Economic Complexity said Russia's top trading partners include China and Germany.

Since the invasion, European and Western countries have unveiled a slew of sanctions packages aimed at crippling Russia's economy.

Ukraine's government has routinely lobbied for harsher sanctions and led a push to try to redirect European Union countries away from Russian gas and oil — a main source of Moscow's federal revenue

I'm not convinced by the argument that collapsing imports implies an imploding economy, if the imports are not collapsing because of demand but because of sanctions.  (Imports are usually strongly correlated with domestic economic activity)  Of course, the cessation of imports of vital technologies will eventually lead to economic collapse.   And exports are surging as the oil and gas prices zoom.  

Two things will cut Russian exports: the ever tightening embargo on Russian oil and gas exports by Europe; and the fact that global recession in 2023 will reduce oil demand and with it the oil price.   But even though these forces will eventually be devastating for the Russian economy, so far the downturn has been mild, though I don't doubt it will intensify.   The stock market has rallied, as has the rouble, and though Russia's PMI has fallen, it rebounded in May.  

However, by the end of 2022, the Russian economy will be in dire straits, and it will only fall deeper into recession in 2023.  To date, however, that process has only just begun.