The war in Ukraine could sharply accelerate the slowdown of the Russian economy - economists
Moscow - Kyiv, July 1 (Navigator, Mikhail Stamm) - Like the war in Georgia in 2008, the civil war in Ukraine began during a period of sharp slowdown in the Russian economy, writes the rector of the Russian Economic School Simeon Dyankov in Vedomosti; senior researcher at the Skolkovo Moscow School of Management Christopher Hartwell and the rector of the Skolkovo Moscow School of Management Andrei Sharonov. In their opinion, all this could plunge the Russian Federation into a new crisis.
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The global economic environment is not nearly as favorable as it was 10 years ago: there is widespread disappointment in rapidly developing markets. In addition, the Russian economy and prospects for future economic growth are particularly under pressure from the so-called middle-income trap, fatal dependence on world oil prices and the negative consequences of the development of the Ukrainian crisis.
Finally, there is no doubt that instability in neighboring Ukraine will affect Russia's growth trajectory. During the spring of 2014, annual growth estimates fell to almost zero, and Western sanctions increased instability and anxiety in the Russian market. After two decades of faltering progress towards integration into the global financial system, Russia may find itself cut off from major international forums and, to some extent, isolated from financial markets.
While the direct consequences of political events in Ukraine are unlikely to last long, the problem is that they have begun to emerge at the worst possible time for the Russian economy. International investors were already cautiously looking for ways to exit the Russian market, and now the growing instability and uncertainty of the future of Russia and Ukraine is pushing money towards an outflow. Russian officials are already cutting GDP growth forecasts from 2,5% to a paltry 0,5%, and even that estimate appears optimistic to the Finance Ministry. Thus, in combination with internal and structural difficulties, the external shock from Ukraine will negatively affect the perception of the Russian market, which will grow at a minimal pace.
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