Politicsuk economyRussiaVladimir Putin

Russian Economy Hit By Ukraine Crisis As Set To Grow By Just 0.2%

Putin's Ukraine Clash Hits Him In The Wallet
Asa Bennett
|
Open Image Modal
Russian President Vladimir Putin listens during a meeting with prosecutor general Yuri Chaika, not pictured, at the Novo-Ogaryovo residence outside Moscow on Tuesday, July 9, 2013. The Russian prosecutor general says foreign-funded NGO have been dodging the foreign agent law and have received money through foreign embassies in Russia. (AP Photo/RIA Novosti, Alexei Nikolsky, Presidential Press Service)
ASSOCIATED PRESS

Vladimir Putin's military engagement with Ukraine has taken its toll on Russia's economy as the International Monetary Fund has issued a withering verdict on the prospects of its economic growth this year.

The IMF said that Russia's economy would grow by just 0.2% this year following a collapse of business confidence and foreign investment "aggravated by geopolitical tensions", in a downgrade from 1.3%, marking the financial body's biggest downward revision of all the countries. Russia would go on to grow by only 1% in 2015, the IMF said.

This comes as European leaders have pushed through more economic sanctions against Russia following the renewed crisis in Ukraine caused by the Malaysian Airlines flight MH17 crashing.

See also: EU Sanctions Against Russian Elites Could Pose Existential Threat To Putin Regime

The IMF's verdict for Britain was much more positive, in a welcome boost for chancellor George Osborne before the Office for National Statistics confirms on Friday that the recession is officially over.

The UK is now on course to outpace the world's major advanced economies this year, according to their estimates, with the country's predicted GDP growth for this year increased to 3.2%.

The projection is better than the organisation's other forecasts that the United States will grow by 1.7% this year, Germany by 1.9% and Canada by 2.2%.

In response to the IMF's assessment, Osborne said: "Today the IMF has upgraded their 2014 forecast for the UK by more than any other major economy.

"The government's long term economic plan is working. But the job is not yet done and so we will go on making the assessment of what needs to be done to secure a brighter economic future."

The IMF rounded down growth for the global economy from 3.7% in April to 3.4% today, with IMF director Olivier Blanchard saying: "The recovery continues, but it remains a weak recovery."

"Advanced economies are still confronted with high levels of public and private debt, which act as brakes on the recovery. These brakes are coming off, but at different rates across countries."

6 Reasons Why It Doesn't Look Good For The Pro-Russia Rebels
A boast on social media from rebel leader Igor Girkin (01 of05)
Open Image Modal
Commander and self-proclaimed minister of defence of so the called 'Donetsk People's Republic' Igor Girkin was reported to have claimed credit for shooting down MH17, posting a boast on the VK social media site, which was later removed. It appears to have mistaken the plane for a Ukrainian army plane.“The plane has just been taken down somewhere around Torez," he wrote. "It lays there behind the Progress mine. We did warn you – do not fly in ‘our sky'." (credit:ALEXANDER KHUDOTEPLY via Getty Images)
Two Ukrainian military aircraft have been shot down by rebels, in just four days(02 of05)
Open Image Modal
Armed with shoulder-missiles, the separatists have been taking down Ukrainian military jets since June. On June 13, a Ukrainian transport plane carrying 40 paratroopers and nine crew members was downed by rebel missiles. Pro-Russian rebels claimed responsibility for shooting down two Ukrainian Su-25 fighters on Wednesday, one was purportedly hit by a surface-to-air missile. (credit:VIKTOR DRACHEV via Getty Images)
The rebels do not have aircraft - so why would Ukraine's military shoot down a plane?(03 of05)
Open Image Modal
Shashank Joshi, a Research Fellow at the Royal United Services Institute wrote in the Telegraph: "Separatist, pro-Russian rebels do not have aircraft. Therefore it is unlikely, though not beyond doubt, that the Ukrainian military would be trying to shoot down aircraft."Ukraine did shoot down a Russian airliner in 2001. It crashed into the Black Sea, killing all 78 passengers and crew because of what the country's security council said was "an accidental hit from an S-200 rocket fired during exercises"." It took eight days for Ukraine to accept responsibility. (credit:DOMINIQUE FAGET via Getty Images)
A Buk missile was seen in the area, which is controlled by pro-Russia rebels(04 of05)
Open Image Modal
A reporter for the Associated Press reported seeing a Buk missile, the kind believed to have taken down the flight, at Snizhne, a city in eastern Ukraine within the Donetsk Oblast. It would take around half an hour to reach the site of the crash from Snizhe. The reporter "observed a Buk missile system, which can fire missiles up to an altitude of 22,000 meters (72,000 feet)," the report says. (credit:YURI KADOBNOV via Getty Images)
Rebels boasted of seizing a base which contained a missile launcher(05 of05)
Open Image Modal
On June 29, the Donetsk People’s Republic seized control of a Ukrainian anti-air military installation, RIA Novosti reported."The forces of Donetsk People’s Republic assumed control of A-1402 military base," the militia's representative is quoted as saying, adding that the facility is equipped with Buk mobile surface-to-air missile systems. DPR "prime minister" Alexander Borodai yesterday denied having a Buk missile, though he added "unfotunately" because it was something the rebels desired. Speaking to Kommersant FM and blaming the Ukrainian army, the rebel leader added: “We only have artillery that can hit a target at 2,500 meters.” (credit:DOMINIQUE FAGET via Getty Images)
Suggest a correction
|
Submit a tip