Vladimir Putin acknowledged the negative impact of sanctions on the Russian economy

Russian President Vladimir Putin acknowledged on Wednesday that the sanctions imposed on Russia for invading Ukraine could have negative consequences for the country’s economy.

“Sanctions imposed on the Russian economy in the medium term can really have a negative impact on it,” Putin warned during a televised meeting with the government.

Putin has so far downplayed the effects of the sanctions, which affect many areas of activity, including the strategic hydrocarbon sector.

More than a year after the offensive began in Ukraine, “unemployment is at its lowest level” at 3.6 percent, Putin said, quoted by France’s AFP news agency.

Putin said inflation would “fall below 4%” by the end of March after rising to nearly 20% in the spring of 2022.

“But this does not mean that all problems have already been solved,” he warned.

“Returning to a growth trajectory should not slow us down,” Putin said, calling for “guaranteeing Russia’s economic sovereignty.”

Putin called on the government and business executives to “ensure the rapid launch of new projects in manufacturing, especially in the production of high-tech products,” a sector that has suffered from the departure of many specialists abroad.

“Our financial system should play an important role in meeting the needs of exporters. And we should replace Western companies that worked in this niche,” he said.

At a summit with his Chinese counterpart Xi Jinping a week ago in Moscow, Putin suggested that Chinese companies replace those that left Russia after he ordered an invasion of Ukraine on February 24, 2022.

The two leaders expressed their willingness to deepen economic relations between the two countries, but many observers saw the summit as a sign of Moscow’s growing dependence on Beijing, AFP reported.

The Chinese economy has largely absorbed Russian oil and gas exports, which are the target of Western sanctions.

While these new markets have allowed Russia to partially offset lost markets in Europe, reliance on Asian heavyweights puts China and India in a strong position to negotiate price cuts.

Addressing the Federal Assembly in late February, Putin called on Russian oligarchs to repatriate their funds to Russia to support the national economy.

In solidarity with Ukraine, Western allies have imposed several packages of economic sanctions on Russia to try to prevent Moscow from funding its military efforts.

In addition to the sanctions, Kyiv’s allies have also supplied weapons to the Ukrainian armed forces to counter Russian forces.

Since the exact number of civilian and military casualties is not known, the war in Ukraine plunged Europe into the most serious security crisis since World War II (1939-1945).