Economy Minister Alexei Ulyukayev told parliament that growth was only 0.8% in the first quarter — far short of the ministry's earlier prediction of 2.5% — because of "the acute international situation of the past two months" as well as "serious capital flight," the Associated Press reports.
The Wall Street Journal reports Ulyukayev said about $63 billion left Russia in net capital outflow in the first quarter and gross domestic product contracted by 0.5% on the quarter in seasonally adjusted terms.
The crisis has decimated the ruble, leading nervous investors to postpone projects and convert rubles into foreign currencies.
In the first three months of 2014, capital investment shrank by 4.8% compared with a year ago, Ulyukayev said, according to the Journal.
Another official, Finance Minister Anton Siluanov, told a government meeting Tuesday that Russia could see zero growth this year, according to RT.com, a state-owned TV channel in Russia. At the start of the year, the government had forecast 2.3% growth.
Investors' chief concerns are that the U.S. and European Union might escalate their sanctions against Russia to affect trade, particularly in the valuable energy market. Europe, Russia's largest trading partner, buys more than three-quarters of Russia's crude oil and natural gas exports. Russia's energy revenue in turn funds about half the government budget.
The Ukrainian crisis threatens to increase the Russian economy's challenges, the World Bank said in March. Its 1.3% growth rate in 2013 was the lowest in 13 years after a slump in 2009 caused by the global financial crisis.
The World Bank predicted the economy could shrink by 1.8% this year if instability over Ukraine continues and Russia is hit with more Western sanctions! , according to the Associated Press.
No comments:
Post a Comment