According to a report from Business Insider, Vladimir Putin's decision to invade Ukraine has reportedly managed to destroy 15 years of financial gains Russia has made with no end in sight.
The report points to a prediction made by the highly influential Institute of International Finance, that said the unprovoked invasion, which was then followed by international condemnation and sanctions, has plunged Russia back to economic levels seen in 2007.
According to the IIF, made up of experts from top global financial firms, the economic devastation has three components, with the organization pointing to "companies pulling out of Russia and laying off workers, a collapse in exports thanks to sanctions and talented Russians leaving the country."
Elina Ribakova, the IIF's deputy chief economist, explained the Russian incursion triggered the "full disintegration of 30 years of investment," adding, "What is the number you are going to put on ripping apart 15 years of value chains."
"The IIF forecasts that Russian gross fixed capital formation will contract 25% in 2022, imports 28% and exports 25%," the report states before adding that, "Additional measures, such as those related to the financial system and/or key Russian exports (and imports), would be possible and could lead to dramatic consequences for the Russian economy, as well as the government’s ability to continue its war effort in Ukraine. However, the costs of such actions could be significant for the sanctions-imposing countries as well."
According to Insider's Kieran Corcoran, "Russia is teetering on the brink of a historic debt default as it has encountered more and more difficulties in paying its foreign creditors after having been cut out of the financial system. Domestic capital controls have shored up its currency, but with demand for energy declining in many parts of the world, it's had to offer fuel at huge discounts, particularly crude oil."
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