15.11.2019

New US sanctions will cut 1 trillion rubles from Russia’s GDP

The new sanctions that Washington announced to Moscow were expected to have an impact on the ruble exchange rate: the Russian national currency fell to 68 for the dollar and 79 for the euro on exchange trades on Aug. 22. And despite the fact that the package of US sanctions that came into this day is not the main threat to the Russian economy. Washington’s restrictive measures concern only the embargo on the export of American high technologies, which are involved in the domestic market in a fairly narrow range of production spheres. However, if the US takes the rest of the announced anti-Russian measures, the Russian economy, according to experts, will not be bothered – its growth rate may fall by half. This package of sanctions may come into effect approximately at the end of November.

The US government and legislative departments divide the new package of sanctions into two parts. The first of them comes into force on August 22 and concerns the ban on deliveries from the US of high-tech products – electronics, sensory and laser equipment, innovations in the field of hydrocarbon production and processing. They are introduced by the administration of Donald Trump. Although it will bring some troubles to the domestic economy – in particular, the ruble is already falling down, – however, according to experts, it will not be a serious test for our country.

Simultaneously, a new list of sanctions was published by the US Treasury. It concerns the cooperation of Russians with the DPRK and extends to several domestic companies and vessels navigating the Russian flag.

The second wave, which threatens to overwhelm Russia in three months, may be much more threatening. The US senators introduced a bill to Congress allowing 90 days to impose general economic sanctions against Russia, which will have the character of not personal restrictions, but will extend to intergovernmental relations between Moscow and Washington.

Under the new restrictions, US banks will be banned from directly or indirectly lending to our country, Washington will oppose the financial support of our country from international investors, any trade relations between Russia and the United States will impose an embargo, and Aeroflot flights to America will cease.

Washington believes that such sanctions should apply to all state companies in which, according to the US State Department estimates, up to 40% of Russians are involved and that they provide 70% of the Russian economy. The decision to put them into effect should be taken within 90 days – this period Washington gives Russia a number of conditions: the guarantee of non-use of chemical and biological weapons and the admission of US inspectors to Russian enterprises and the laboratory.

The Russian Foreign Ministry has previously called such conditions impracticable. Hence, the new sanctions will somehow follow – perhaps, the truth, that is not in full.

According to experts, Washington is trying to hit the most painful for Russia sphere – in the economy, and this blow can hit the target. As the doctor of economic sciences Igor Nikolaev believes, the most disastrous for Russia will be the termination of export-import operations. “The share of Russian exports to the US is about 4% of our foreign trade turnover. The states are the sixth in terms of turnover by Russia’s external partner. At the same time, the US foreign trade turnover depends on our country only by 0.5%. The refusal of the Americans from partnership with Russian companies will not seriously harm their domestic economic situation, so domestic companies will have to look for new counterparts on the international market, “the expert believes.

Meanwhile, Nikolaev is sure that the administration of Donald Trump will choose the most serious legislative restrictions against Russia. “Most likely, they will be reciprocal sanctions in the field of diplomatic relations. Economic discrimination will depend solely on economic conditions, “the expert believes.

Russia, as Nikolaev believes, has its own trump cards in the trade war. According to independent analysts, Russia supplies the international aircraft construction concerns Boeing and Airbus with approximately 40-60% of the titanium used in their production, the embargo of which will hit the US market.

“Apparently, the Trump administration will even after three months choose the most mild economic restrictions: the limited expulsion of Russian diplomats from the United States, the ban on lending to Russian banks by US banks, and the refusal of Russia’s support from international financial organizations (both are also partially currently involved) – considers the adviser of INSOR Nikita Maslennikov.

The most painful will be a complete US refusal from export-import relations with Russia. This step can take up to 1% of our country’s GDP. According to the forecast of the Ministry of Economic Development, in 2019 Russia’s GDP will exceed 100 trillion rubles. Thus, the new US sanctions will “cut” this figure by 1 trillion rubles. It is worth noting that approximately this amount the government is trying to earn by raising the VAT.

Spread the love

Leave a Reply

Your email address will not be published. Required fields are marked *