A new round of Western sanctions on Russia over the crisis in Ukraine could seriously impact the already stalled economy, Economy Minister Alexei Ulyukayev said Saturday.
Russia has prepared three scenarios in the event of tougher economic sanctions and in the worst case "economic growth rates go seriously into the negative," he was quoted as telling the Rossiya channel.
"Investment rates go into more negative territory, incomes decrease, inflation grows, state reserves shrink," he added.
Moody's cuts Russia's credit outlook
Moody's has cut the credit-rating outlook of Russia to "negative," a sign of a possible future downgrade.
The credit agency cited the threat to Russia's economy due to Kremlin meddling in the Ukraine crisis.
Moody's warned the spread of the Ukraine conflict from Crimea to the country's eastern border with Russia has raised the dangers of "geopolitical event risk" for Moscow, including harsher Western sanctions.
"Sanctions against Russia so far have been mainly targeted against individuals, but the G7 countries have reiterated the possibility of further sanctions targeting specific sectors of the economy," the agency said.
The rating agency said Russia's lack of a strong plan and reforms had also added to the bleak outlook.
Moody's held Russia's overall rating at BAA1, in the low range for investment-grade bonds.
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