Sanctions could wipe 9% of Russia’s GDP, predicts IMF

The sanctions  imposed on Russia by the EU and the US in the wake of the crisis in Ukraine could  wipe 9% off its gross domestic product over the next few years, the IMF said today. Although Russia’s economy is showing signs of stabilising after a period when sanctions and the dip in oil prices tipped it into crisis, “the effects of sanctions in terms of external access to financial markets and new investment technology will linger,” the IMF has concluded.
 The immediate effect of sanctions and counter-sanctions had been to wipe between 1%  and 1.5% off Russian GDP to date, but that figure would rise to9% over the next few years, it predicts – although it is cautioning that its model-driven results are subject to significant uncertainty.
The IMF also forecast “weak” medium-term economic growth of around 1.5%. “Slow-moving structural reforms, sluggish investment and adverse population dynamics are all part of the picture,” it said, reiterating its long-standing advice for Russia to reduce the role of the state in the economy, protect property rights and boost competition.