Rare glimpses of honesty from senior Russian officials. (Another 🧵 on sanctions.)

Elvira Nabiullina, head of the Central Bank: logistical blockade hurts even more than financial sanctions. Supply chains are broken. (1/11)

Inventories will run out very soon and inflation will soar. (2/11)

www.cbr.ru/press/event/?id=12824

Sergei Sobyanin, mayor of Moscow: 200,000 people are at risk of losing jobs in Moscow alone. (3/11)

www.sobyanin.ru/prodolzhaem-realizatsiyu-plana-povysheniya-ustoichivosti-stolichnoi-ekonomiki

Andrei Belousov, deputy prime minister [this one wasn't reported in the West, but it's crucial]: economic stimulus to fight the crisis without risking further inflation is limited to 7-8 trln rubles and the government has already reached this limit. (4/11)

Thus there's not much room to further stimulate the economy financially. (5/11)

www.finmarket.ru/news/5699036

Overall: economic sanctions are very effective at disrupting the Russian economy. Whether they can weaken the war machine is another matter. There are two factors: 1) overall military budget, 2) dependence on imports in the military-industrial complex. (6/11)

Regarding the first factor: I don't think anything short of complete energy embargo can reduce military spending, and even that might not do it. (7/11)

Second factor is trickier, however. Military production is very opaque and no one will disclose import dependency there, obviously, but there is some indirect evidence. (8/11)

E.g. Dmitry Rogozin, then deputy prime minister, admitted in 2014 that 640 Russian military products require components from NATO and EU countries. (9/11)

topwar.ru/163525-importozameschenie-v-rossijskom-vpk.html

There were plans to substitute most of these imports by 2018, but, knowing the general ineptitude of Russian economic policy, I seriously doubt that this goal was reached. (10/11)

Bottom line: logistical and other export-oriented sanctions likely disrupt supply chains in the military industry and therefore should stay. (11/11)