July 11, 2014
The Russian government acknowledged that aggravation of sanctions is capable to produce a significant adverse at the dynamics of the country economy
This was reported by Russian Gazeta.ru with reference to the report of Ministry of Finance about the main directions of budget policy for 2015-2017. It was mentioned in the department that escalation of tension around Ukraine in 2014 can reduce GPD growth to 0.2-0.3 %. However, Russia might have enough reserves to compensate the main part of possible economic losses in short and medium term.
Though ‘in a longer perspective sanctions might have a significant impact on reducing of budget sustainability as well as the worsening of conditions and reducing of opportunities for modernization while limiting the import of technology, investment and best practices’.
It should be noted that in preparing of this forecast Russian Finance Ministry used the scenario that assumes no large-scale economic sanctions.
Accordingly if USA and EU agree introduction of the third phase of sanctions the negative effect might be worse than the one predicted by Russian government.