Guest post: Russia’s response to western sanctions – beyondbrics - Blogs - FT.com:
"The “stage three” sanctions announced by the US and the European Union against Russia last week are designed to bring about change in President Vladimir Putin’s behaviour by targeting Russia where it is most vulnerable – its economy.
Earlier rounds of sanctions – which primarily targeted government officials and businesses owned by those officials – were not taken seriously by their targets. Being sanctioned was seen a “badge of honour” by senior Russians.
The sanctions achieved little directly but had an impact on the market in so far as Russian companies found it increasingly difficult and expensive to gain access to Western capital. This intensified longer-term trends in the Russian economy, not least increasing capital outflow ($74.3bn in the first half of 2014, compared with $62.7bn for the whole of 2013) and declining domestic investment. GDP growth fell to 0.9 per cent in the first quarter of 2014 compared with 1.6 per cent in the same period last year."
'via Blog this'
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