FAST FIVE: U.S. Sanctions Cut 6% Off Russian GDP Since 2014, New Study Claims
The study found that while some of the blame is due to the slump in oil prices, sanctions have been the bigger driver, and perhaps partly the introduction of inflation targeting and a sell-off in emerging markets could be other factors. Via the AP According to the report, “The underperformance has been much bigger than crude alone can explain.” Scott Johnson, study author and analyst at Bloomberg Economics in London, concluded “Part of the gap is likely to reflect the enduring impact of sanctions both imposed and threatened over the last five years.” Bloomberg reports of Moscow's reactionary measures in the face of sanctions: Policies aimed at protecting the nation from future sanctions by building up reserves have made it more resilient, but they have come at the expense of growth.
Still, the Kremlin argues that the sanctions haven't had an impact on its foreign policy.
Perhaps more notably the Russian economy will continue to slide, according to analyst predictions: However, the fact that the gap in potential versus actual growth continues to widen implies that sanctions are having a prolonged impact, the analysts said.
The lingering effect puts under question Russian government forecasts that policy changes and investment will push GDP growth above 3 percent by 2021.
“If sanctions remain in place, as seems likely, that's one more reason to expect the economy to come up short.” Meanwhile the US State Department announced this week it's actually considering further rounds of draconian sanctions related to the Skripal case. US Assistant Secretary of State for International Security and Nonproliferation Christopher Ford said on Wednesday: “Under statute- there is a menu of options if you will, things that need to be considered.