Monday, August 24, 2015

Alexy Lossan — Russia's GDP shrinks only 0.5 percent due to sanctions, experts say

The introduction of anti-Russian sanctions in relation to the Ukraine crisis resulted in the decline of Russia's economy only by 0.5-0.6 percent. Russian experts believe that first and foremost the economy is affected by oil prices, not the sanctions.
This seems to be the consensus view. 

What the sanctions have done is provide space and cover for Russia to diversify its economy, rebuild manufacturing, and substitute domestic production for imports without imposing protectionism. The Russian economy will emerge much stronger, more independent, and better positioned. Vladimir Putin has publicly thanked the West for this opportunity, which otherwise would have been difficult politically for Russia to undertake. But under the circumstances Russians are quite willing to undergo the rigors of restructuring.

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