sanctions on russian economy will bark and bite
Last Updated : GMT 00:27:23
Arab Today, arab today
Arab Today, arab today

Sanctions on Russian economy will bark and bite

Arab Today, arab today

Arab Today, arab today Sanctions on Russian economy will bark and bite

A board listing foreign currency rates
Moscow - AFP

Moscow dismisses Western sanctions as mostly bark, but analysts warned the latest measures announced by the EU and US will also bite the Russian economy, which is teetering on the edge of recession.
Washington and Brussels announced on Tuesday the strongest sanctions on Russia since the Cold War over Moscow's annexation of Crimea and support for separatists in Ukraine.
The US prohibited three leading Russian banks from raising anything but short-term funding on US markets.
The EU also began imposing so-called sector sanctions, crimping access of Russian state-controlled banks to European capital markets.
It also banned future arms sales to Russia, restricted the export of goods with both defence and civilian applications, and clamped down on technology transfers, especially in the energy sector.
Russian officials have remained defiant, saying the sanctions would not sway policy.
"Talking to Russia in the language of sanctions is useless," Deputy Foreign Minister Grigory Karasin said in comments published in Kommersant broadsheet on Wednesday.
"Sanctions may help unite us, resulting in Russia having a stronger economy and a healthier society that no longer has any illusions."
The government has recently said it plans to raise its annual growth forecast from 0.5 to around 1.0 percent, but last week the International Monetary Fund slashed its estimate by 1.1 points to just 0.2 percent growth.
- 'Direct hit on economy' -
Analysts and businesses believe that the sanctions could begin to bite.
The Moscow-based Association of European Businesses said it "expects that these new sanctions will not only hurt the Russian economy," but will also hurt the European Union, which is struggling to maintain growth.
EU-Russia trade amounted to 326 billion euros ($437 billion) last year.
The Brussels-based EU Observer cited an EU source as saying the sanctions will hurt the Russian economy by 23 billion euros this year, or 1.5 percent of its gross domestic product, and by 75 billion euros or 4.8 percent of GDP next year -- enough to push the country into recession.
"This is more than serious, unlike the two previous sanctions packages, this is a direct hit on the country's economy as a whole," said Nikolai Petrov, a professor at Moscow's Higher School of Economics.
"The effects of this will be quickly felt by ordinary Russians," he told AFP.
So far sanctions have not been felt directly, although the ruble has slid by about 7.5 percent against the dollar since the start of the year, making imported goods more expensive.
A recent survey by the independent Levada polling centre found that 58 percent of Russians are not worried about the sanctions.
Igor Nikolayev, head of the FBK Strategic Analysis Institute, told AFP that effects of the sanctions would not be felt immediately, but only gradually.
- Sanctions squeeze cheap credit -
"Very important for the Russian economy is the halting or sharp reduction in the access to cheap credit," he said.
Not only state-controlled banks face higher borrowing costs, Russian companies could also have to pay higher rates if Western investors become wary of lending, crimping investment and economic activity.
Russian corporate debt stands at $700 billion, he said, and must be refinanced.
Analysts at London-based Capital Economics warned recently that the indirect impact of sanctions could be severe.
"Even if the direct impact of sanctions is limited, the indirect impact can be significant," chief emerging markets economist Neil Shearing said in a research note.
He said sanctions could spark another increase in capital flight from the country, deterring foreign and domestic investment "that is needed to restore Russia's economy vigour over the long-run".
Research director at the Higher School of Economics, former economy minister Yevgeniy Yasin, said on radio Echo of Moscow that restrictions on the import of cutting-edge technologies would harm the economy.
This could hit the energy sector particularly hard.
While the sanctions have been crafted to avoid disrupting sales of Russian gas and oil, which are of great importance to Europe and the global economy, Russia still needs massive investment and technology from Western companies to maintain output in the sector, which brings in two-thirds of export earnings.
Analysts said technology restrictions would in particular hurt development of new oil and gas fields in the Arctic.
"That is because on the Arctic shelf we are almost 100 percent dependent on imported technology and equipment," Sberbank CIB analyst Valery Nesterov was quoted as saying by RIA Novosti news agency.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

sanctions on russian economy will bark and bite sanctions on russian economy will bark and bite

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

sanctions on russian economy will bark and bite sanctions on russian economy will bark and bite

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today The Big Apple bike boom

GMT 10:47 2017 Wednesday ,22 November

The Big Apple bike boom
Arab Today, arab today Keep kids busy at Thanksgiving gatherings

GMT 11:14 2017 Friday ,10 November

Keep kids busy at Thanksgiving gatherings
Arab Today, arab today Leaders of Russia, Iran, Turkey meet

GMT 10:12 2017 Wednesday ,22 November

Leaders of Russia, Iran, Turkey meet
Arab Today, arab today 'Advanced' cyber attack targets Saudi Arabia

GMT 10:18 2017 Wednesday ,22 November

'Advanced' cyber attack targets Saudi Arabia
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today May under Brexit pressure at EU reform summit

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Honda recalls 800,000 minivans

GMT 11:43 2017 Wednesday ,22 November

Honda recalls 800,000 minivans
Arab Today, arab today VW says will invest over 34bn euros

GMT 07:19 2017 Tuesday ,21 November

VW says will invest over 34bn euros
Arab Today, arab today Singer Jahda Wahba has unlimited ambitions

GMT 07:56 2017 Monday ,20 November

Singer Jahda Wahba has unlimited ambitions
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 09:23 2017 Saturday ,18 November

Fedra happy for “Between Two Worlds” success

GMT 11:15 2017 Thursday ,16 November

Angola oil boss sacked by father's protege

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 11:49 2017 Thursday ,17 August

Egyptian artist presents new collection of designs

GMT 13:41 2017 Tuesday ,21 November

French choke up over proposal

GMT 00:44 2017 Monday ,20 November

Japanese regulators raid Airbnb

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday