What's going on?

Reports out this week suggest Russia�s hiding a scary economic outlook behind a strained�smile.

What does this mean?

Russian officials would have you believe their sanction-loaded economy is doing just fine and dandy, but the cold, hard paperwork tells a different tale. A (seemingly not very) confidential document warns sanctions could cause a long recession, especially if more countries join Europe � Russia�s main export market � in boycotting the country�s goods and energy (tweet this). What�s more, Russia can�t even import replacement parts for its western equipment, which�ll stunt its growth by forcing it to rely on less advanced alternatives from Asia instead. That�s the brawn gone, and the brains might follow: the report also estimates that 200,000 tech specialists could flee to unsanctioned soil by 2025. No wonder, then, that two of the report�s three scenarios show the economy shrinking even faster next year to bottom out 12% lower than in 2021. What�s more, they predict the economy could take over a decade to recover.

Why should I care?

Zooming in: Cross your fingers.
Plucky Russia�s still shooting for its �target scenario�, which would see its economy bounce back pretty quickly. There�s hope: the report suggests measures that could give the economy a leg up. Not much hope, though: the country�s already tried many of those steps over the last decade, and they couldn�t stop its economy stagnating before sanctions came in � let alone in an environment like today�s.

The bigger picture: Heavy metal.
Russia�s metal producers are really taking a beating: they�re already losing nearly $6 billion a year as restrictions take their toll, and metal prices are slipping lower as countries cut their hauls in the face of a global recession. That�s not great for anyone: copper and steel are now languishing about 30% and 50% below their highs from earlier this year, and their multi-purpose bragging rights tend to mean they reflect global economic health pretty well.