wiiw Forecast Reports
RUSSIAN FEDERATION: Stagnation and isolation ahead
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Peter Havlik
in: On Thin Ice: CESEE Core Resilient in the Face of EU Stagnation and the Ukraine Crisis
wiiw Forecast Report No. Autumn 2014, November 2014 , pp. 117-120
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RUSSIA
The Russian economy is languishing in a prolonged slump. The country was already ‘stuck in transition and stagnation’ before the outbreak of the Ukraine crisis. The current sanctions deter investments, foster capital outflows and boost inflation. Turning inwards and developing import substitution strategies using accumulated domestic resources may prevent an outright recession, but it will not kick-start the requisite modernisation drive. The wiiw baseline scenario – assuming no further escalation of the Ukraine conflict – reckons with a meagre acceleration of GDP growth based on a gradual revival of investment. The above notwithstanding, the conflict over Ukraine will have a lasting impact on trade, investments and integration with Europe.
The Russian economy is languishing in a prolonged slump. The country was already ‘stuck in transition and stagnation’ before the outbreak of the Ukraine crisis. The current sanctions deter investments, foster capital outflows and boost inflation. Turning inwards and developing import substitution strategies using accumulated domestic resources may prevent an outright recession, but it will not kick-start the requisite modernisation drive. The wiiw baseline scenario – assuming no further escalation of the Ukraine conflict – reckons with a meagre acceleration of GDP growth based on a gradual revival of investment. The above notwithstanding, the conflict over Ukraine will have a lasting impact on trade, investments and integration with Europe.
Reference to wiiw databases: wiiw Annual Database, wiiw Monthly Database
Countries covered: Russia