Russia Admits Sanctions From Ukraine War 'Not Easy' on Country's Economy

Kremlin spokesman Dmitry Peskov has spoken of the tough impact sanctions in response to Vladimir Putin's invasion of Ukraine have had on his country but warned that ultimately they will rebound on the rest of the world.

In an interview with Tass published on Tuesday, Peskov said that the measures which have isolated the Russian economy from the global financial system have been difficult but suggested they were simply pushing Russia towards "friendly" countries.

"The situation is not easy, it can rather be described as difficult in terms of this unprecedented economic war," Peskov told Tass, ahead of the St. Petersburg International Economic Forum which Putin will address on Friday.

"But there is a positive side," he said, "this situation is pushing us and our friendly countries to look for new ways of interaction, new mechanisms for interaction and new mechanisms for financial settlements."

Soon after Putin's invasion on February 24, Russia's economy was hit by sanctions imposed by the European Union, the U.S. and their allies aimed at impeding Moscow's ability to fund its war machine.

The Institute of International Finance (IIF), a banking lobby group, said last week that Russia's economy will shrink by 15 percent this year and three percent next year. Output in industries from aviation to automotive has slumped. In May, the number of cars sold across Russia tumbled by 83 percent from the previous month.

However, Russia has benefited from a surge in prices of its major exports of oil and gas and there has been a rebound in its currency, the rouble.

With the EU announcing it would cut its purchases of Russian energy, Bloomberg reported on Monday that half of the Russian oil transported by ship is now heading for Asia, mainly to China and India, which have not joined in taking sanctions against Moscow.

Peskov said there was a pivot away from Europe and the U.S. and that there were "new centers of power in the East," which included "China, India, Indonesia, the Philippines and many, many other countries" and Latin America.

He said that during the COVID-19 pandemic, "politicians in many countries have made a huge number of mistakes" which have been "aggravated by the economic war that was launched against Russia."

"Russia is too big a country for the war against it not to come back to haunt them as a boomerang," he said. "Now we see how all these restrictions, the sanctions that have been introduced [against Russia], are hitting prices for energy, food, and so on," he said, referring to high inflation in the U.S. and Europe.

"Pushing Russia out of international life is an absolutely futile and essentially impossible thing," he added.

Kremlin spokesman Dmitry Peskov
Kremlin spokesman Dmitry Peskov waits to watch the Victory Day military parade at Red Square in central Moscow on May 9, 2022. KIRILL KUDRYAVTSEV/Getty Images