Russian economy will shrink by 20% by 2030 due to sanctions - representative of US State Department

This was stated by the head of the US State Department's Sanctions Coordination Office, Ambassador James O'Brien, reports Ukrinform.

"According to our estimates, over the next few years, the Russian economy will shrink by at least 16% of what it would have been without the war, and by 2030 it will be 20% smaller," O'Brien said.

A representative of the US State Department noted that the effectiveness of sanctions is noticeable in at least three important sectors.

According to O'Brien, sanctions harm the Russian Federation on the battlefield.

"Russia lacks modern means of communication, optics, high-precision materials, as well as drones necessary for active combat, and mostly due to the fact that the Russian Federation remains vulnerable to export controls and sanctions," the diplomat explained.

In addition, due to sanctions, the Russian Federation has less money to compensate for financial losses.

"Russia entered this war with a significant positive balance in its bank accounts. The state had about $640 billion in reserve capital, $300 billion of which is now frozen and unavailable," O'Brien noted.

At the same time, only in the first months of the war, the Russian Federation spent more than $80 billion without taking into account the current reductions in the Russian budget.

The Russian Federation also continues to lose investments and human capital. According to approximate estimates of the State Department, at least 900,000 Russians have fled the country due to war, mobilization and sanctions.

"And in general, they are now much less able to produce at home what they need for the most effective warfare," O'Brien added.

The diplomat noted that the Russian Federation cannot currently import what it needs most.

"As of September, imports of semiconductors have decreased by 70%. As a result, over the next few years, the Russian economy will simply shrink and fall further and further behind," explained O'Brien.

A representative of the US State Department also commented on the prospects of disconnecting all Russian banks from the SWIFT system or introducing other restrictions against them. According to him, the US proceeds from the importance of preserving the stability of the global financial system, therefore it carefully examines the activities of each group of banks in order to mitigate the consequences for others. O'Brien noted that, among other things, it is necessary to ensure the functioning of the global food market.

"This is vital to allow global markets to function, to allow Russia to supply food, fertilizer and energy, especially to the global south, but also to deprive Russia of resources," the diplomat explained.