The possibility of more Western sanctions against Moscow is the key risk for the Russian economy, as much of 21 percent of which has already felt the impact of existing sanctions, Russia’s Analytical Credit Ratings Agency said in a report on Tuesday, according to RIA news agency.
Having dented incomes of Russian households, Western sanctions are expected to weigh on Russia’s oil-dependent economy in the longer run, the Kremlin-backed ACRA said.
The agency assigns national scale credit ratings to financial institutions, corporate sector companies, regional and municipal authorities of the Russian Federation and their financial instruments.
The West first imposed economic and financial sanctions against Moscow in 2014 for its annexation of Crimea and its role in the Ukrainian conflict.
Russia has responded with counter-sanctions, banning imports of a wide range of food from countries that had targeted Moscow. Later, sanctions against Russia were expanded, putting extra pressure on Russia’s economy and the ruble.
“The risk of widening of anti-Russian sanctions remains one of the key risks that the Russian economy could face this year,” ACRA said.
New sanctions listed by ACRA might target more companies, Russian state debt or even disconnect Russia from the international SWIFT payment system.
For now, Russia’s international reserves, which stood at nearly $456 billion as of late June, “fully cover the external debt, which is vulnerable to wider sanctions,” the agency said.
“Sanctions should not be named the key factor that limits economic growth in Russia in the mid-term … The impact of sanctions on growth rate could turn to be more pronounced in the long-term for both companies and the economy in general,” ACRA added.
Western sanctions have hit Russian companies that account for 95 percent of the country’s oil and gas industry revenues. Restrictions imposed on Russian oil and gas companies in 2014 will affect their oil output in the 2020s, the agency’s analysts forecast.
