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Sanctions-related uncertainty poses biggest risks to Russia, says report

April 24, 19:04 UTC+3 MOSCOW

According to the experts from the Gaidar Institute for Economic Policy, the inflow of direct foreign investments in the Russian economy dropped to $1.9 bln in 2018 compared with $27.1 bln in 2017

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MOSCOW, April 24. /TASS/. The uncertainty related to anti-Russia sanctions, rather than the restrictions themselves, poses the biggest risks to Russia as it destabilizes socio-economic processes and triggers outflow of foreign investors, experts from the Gaidar Institute for Economic Policy wrote in a report released on Wednesday.

"The most recent experience of using sanctions shows that the uncertainty related to them causes the biggest problems. The nature of expected sanctions and the terms of their potential application destabilize socio-economic processes and prevent a quick adjustment to possible challenges. That triggers financial market fluctuations, strengthened volatility of the ruble, refusal of foreign investors to cooperate with Russian companies, capital outflow," the report said.

The inflow of direct foreign investments in the Russian economy dropped to $1.9 bln in 2018 compared with $27.1 bln in 2017, which poses another potential implication of sanctions - the risk of technological inferiority, the authors said.

Meanwhile, the sanctions themselves usually have no immediate result and may even help improve the economic situation, the report said. "They (sanctions) often facilitate consolidation of forces and the political system in the country facing them. In some cases, they even help improve the economic situation," the document said.

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