Four million Russians are set to lose their jobs due to the impacts of Western sanctions, according to new research from the Kyiv School of Economics.
The sanctions are set to see Russia’s economy contract by up to 9.5 per cent this year, the study shows.
High oil and gas prices have shielded Russia from the worst impacts of sanctions so far as the country’s economy has been buoyed up by its energy industry.
However, Russia’s energy exports are set to decline in coming months, as Europe strengthens its oil and gas embargoes.
The drop in Russia’s energy export revenues will in turn lead to widespread cuts in public spending, as funding is instead redirected towards bailing out Russia’s banks and bankrolling the country’s military.
Russia is already selling its oil at discounted prices of $80 per barrel, the study says, as it notes the $35 per barrel discount has cost Russia $20bn in the past quarter alone.
The sanctions have in turn caused Russia to become more reliant on its oil and gas sector, due to a nine per cent drop in all other sectors of the country’s economy.