Russian economy going downhill

The Russian economic situation is ‘not stable’, says Economy Minister, Alexei Ulyukayev, as analysts reveal a 0.5 drop in the first three months of the current year.

The International Monetary Fund also decreased its predictions from 1.9 percent to 1.3 percent while the Russian government made the most pessimistic estimate, cutting the 2.5 percent growth formerly anticipated, to an increase that settles between 0.5 percent and 1.1 percent.

The drop comes as the result of the tensions in Ukraine and fear of sanctions, leading to a decline in investment spending and capital flight.

‘In addition to the internal factors that have slowed economic growth, we also have a high level of uncertainty on the global financial markets, serious capital flight and a situation when investors are not ready to make investment decisions given the tense situation in the international arena during the past two months,’ said the Economy Minister in the Russian parliament.

Anton Siluanov, Russia’s Finance Minister, declared that the economy is currently facing the ‘most difficult conditions’ since the global economic crisis in 2008.

A consequence of the economic instability Russia faces, economists said, is that Russia cannot afford a war, including a trade war against the West.