Page 20 - RusRPTJun24

The iconic Russian-made Lada returned to its slot as the most popular model on the market and quickly solved its lack of western input problems, like the dearth of airbags and onboard computers, by the summer of 2022.
Sales of Ladas were up last year, and Deputy Prime Minister and Industry and Trade Minister Denis Manturov said that Russia’s car market will fully recover to pre-pandemic levels by 2030. But at the current pace it looks like sales could reach that benchmark much sooner thanks to the current consumption boom that is being driven by rapidly rising real incomes, according to the central bank’s recent macroeconomic survey.
Russia’s economy was expected to stagnate thanks to sanctions, but instead growth has been surprisingly strong thanks to a military Keynesianism boost and the tight labour market that is driving up wages faster than inflation.
2.7 US bank sanctions cut into Russia’s trade
Threats of secondary sanctions on banks dealing with Russia have cut into its first quarter trade, as Russian firms find it increasingly difficult to transfer money.
In the most effective sanctions imposed yet, in December, the US Office of Foreign Assets Control (OFAC) sent out letters to banks in countries that play a key role in financing Russia’s international trade. As a result several leading Chinese banks cut off relations with Russia and closed their local branches. Leading Chinese bank
Chouzhou Commercial Bank ceased all financial dealings with
20 RUSSIA Country Report June 2024 www.intellinews.com