Tougher sanctions in offing says Kremlin, but will hurt Western interests too

The Kremlin said on Thursday that it expected the West to impose tougher sanctions on it over the war in Ukraine, but that there was a growing sense that such penalties hurt Western interests while Russia’s economy was adapting well.

President Vladimir Putin is girding the $2.1 trillion economy for a long war and Western hopes of stoking a swift Russian economic crisis with some of the toughest sanctions ever imposed have not been realised.

The International Monetary Fund (IMF) has predicted Russian growth of 2.2% this year — faster than either the United States or the Euro area — though the Fund last month lowered its forecast for 2024 growth to 1.1%.

Asked about the expectation that the United States would impose more sanctions, Kremlin spokesman Dmitry Peskov said:

“The expectations are that the United States and the European Union will continue to invent new sanctions, although they clearly already have a shortage of ideas. Both in the USA and in the EU, by the way, there is an understanding that the current packages hit the interests of those states themselves that have imposed these sanctions,” Peskov said.

Western leaders say the sanctions they have imposed on Russia, the world’s biggest holder of natural resources, are the toughest ever imposed on a major economy.

The West has frozen hundreds of billions of dollars of Russian money, but Putin has joked that the sanctions have not stopped the import of Western goods such as luxury Mercedes to Russia – and that Moscow will work to undermine the sanctions by buying what it wants on global markets.

Peskov said Russia’s economy had adapted well to the sanctions and was having some success at operating in the new conditions.

“We don’t wear rose-tinted glasses: the sanctions pressure will continue, and there will be attempts to strengthen it,” Peskov said.