Russian economy meltdown as black market ‘booming’ and ‘nothing’s off limits’ | World | News
Russia’s economy has taken a major hit amid the ongoing war with Ukraine due to sanctions and a falling trade turnover. A former Ukrainian banking boss has warned of the booming black market in Vladimir Putin’s country due to the slow economic growth. Counterfeit goods are allegedly “flooding stores, markets and online shops”, with a total worth reaching into the billions.
Writing on X, the former Chief of the National Bank of Ukraine, Kyrylo Shevchenko, said: “Russia’s black market is booming: 1 in 10 retail goods is now smuggled or fake, worth over $62B — a 58% jump in just 4 years. Thanks to sanctions, legalised parallel imports, inflation, and a freeze on inspections, counterfeit goods flood stores, markets, and online shops. Cosmetics, electronics, baby food — nothing’s off-limits. Nearly 1 in 3 Russians now knowingly buys fakes.”
He added: “Short-term workaround? Hm, maybe. But long-term, black market erodes tax revenue, undermines legal businesses, distorts market signals, and accelerates Russia’s shift toward an unstable, informal economy. It will get out of control.”
Recent figures show Russia’s positive balance of payments – the total income of money from abroad against total outflows – between January and April took a staggering 31.7% hit.
The country’s central bank said the figure was £15.7billion, £7.4billion less than last year’s £23.1billion, which is due to a decrease in the trade balance overall.
Putin’s trade balance surplus – trade specifically in goods and services – during the same period this year decreased by 15.9% to £29.3billion compared to £34.8billion billion for the same period in 2024, the Russian news service Interfax said.
This comes as trade turnover between Russia and China, one of Putin’s primary trading partners, fell by 8.2% between January and May 2025 year-on-year to $88.7billion (£65.9billion), the General Administration of Customs of China reported.
Exports from China to Russia decreased by 6.6% to $38.89billion (£28.8billion), while supplies from Russia to the world’s second largest economy dropped by 9.5% to $49.91billion (£37billion).
In May, trade turnover between the two states totalled $17.7billion (£13.1billion), Russian news service TASS reports, which was 0.6% lower than in April.
