15 years of economic downturn for Russia due to sanctions
The Institute of International Finance (IFF) today announced that sanctions imposed on Moscow over the invasion of Ukraine have destroyed 15 years of Russian economic progress and three decades of integration with the West.
However, the impact of these measures is difficult to predict because they are constantly changing, with possible new sanctions on the one hand and a potential response from Russia on the other, especially in the energy sector.
The war will cost Russian President Vladimir Putin more, but sanctions will not work “Push a switch”IIF economist Elena Ripakova said during a press conference.
In its latest analysis, the IIF predicts that the Russian economy will shrink by 15% this year and another 3% by 2023.
Fiscal sanctions – particularly in reducing Moscow’s ability to repay foreign debt – have pushed up domestic demand as prices have risen and foreign companies have left the country. “Thus obscuring the short, medium and long term economic outlook”. The authors of the report indicate “Some significant effects not yet felt”.
Elena Ripakova noted that sanctions are disrupting global value chains. She looks at one “30 years of investment and the breakdown of relations with Europe”.
According to IIR Executive Vice President Clay Lowry, evaluating the effectiveness of sanctions imposed on Russia depends on what governments are trying to achieve.
“If successful, these sanctions will definitely have an impact (…) if they are to the detriment of the economy.”, And it is expected to increase, he told reporters. However, in the past, sanctions have not proven effective in changing policies, he said.
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