Sanctions linked to the Ukraine crisis could end up costing Russia 9 percent of its gross domestic product, the International Monetary Fund said on Monday, reports Reuters. Russia’s economy is showing signs of stabilisation after slumping under pressure from Western financial sanctions and Russian counter-measures. Low international prices for its oil exports have added to pressure on the rouble and government finances. “The effects of sanctions in terms of external access to financial markets and new investment technology will linger,” the Fund said, summing up the findings of a mission in May. Last year Western countries imposed restrictions that limit international financing for major Russian banks and energy companies, and also high-tech exports to the energy sector. Russia retaliated by banning imports of most Western food products. The Fund estimated the immediate effect of sanctions and counter-sanctions had been to wipe between 1 and 1.5 percent off GDP, rising to 9 percent over the next few years. These model-driven results were subject to significant uncertainty, it cautioned. The IMF also forecast “weak” economic growth of around 1.5 percent annually in the medium term. Russia’s economy was growing around 7 percent a year before the 2008 global financial crisis.
