News / Europe

World Bank: Crimean Standoff Could Shrink Russian Economy

A cashier counts a pension payment in Russian roubles, in a post office at the Crimean city of Simferopol, March 25, 2014.
A cashier counts a pension payment in Russian roubles, in a post office at the Crimean city of Simferopol, March 25, 2014.
VOA News
The World Bank has concluded that Russia's already weak economy could markedly shrink this year if Moscow's standoff with the West over its annexation of Crimea intensifies.

In a new report Wednesday, the World Bank said the Russian economy could contract 1.8 percent in 2014 and investors could pull a record $150 billion out of the country.

The Washington-based international lender said a "lingering confidence problem" over Russia's economy is now "a crisis of confidence" that has "clearly exposed" its weakness.

The World Bank said it assumes that "political risks will be prominent in the short-term" in the aftermath of the initial economic sanctions imposed by the United States and the European Union against key Russian lawmakers and advisers linked to President Vladimir Putin. The West has threatened to impose stiffer sanctions if Russia advances farther into Ukraine after taking control of its Crimean peninsula and claiming it as part of Russia.

The World Bank said if the Russia-Ukraine standoff escalates, "uncertainty could rise around sanctions from the West and Russia's response to them." It said an increase in political tensions "would further depress confidence and investment activities."

The report said that no matter how the Crimean dispute plays out, there is a risk Russia "will be put back into a crisis mode" to handle its economy.

The World Bank called its projection for a 1.8 percent contraction a "high-risk scenario." But it said that even if the effect of the standoff over Crimea is short-lived, Moscow's economy would only expand by 1.1 percent this year, half what it projected in December.

Russia has estimated that investors have withdrawn $70 billion from the country in the first three month of the year, compared with $63 billion for all of last year. In its bleakest assessments, the World Bank said that $150 billion could be taken out of Russia this year and $80 billion in 2015.

Some information for this report was provided by AP, AFP and Reuters.

You May Like

Obama: I Will Do 'Everything I Can' to Close Guantanamo

US president says prison continues 'to inspire jihadists and extremists around the world' More

Sierra Leone Educates on Safe Ebola Burials

Also, country is improving at rapid response to isolated outbreaks, but health workers need to be even faster, officials say More

Religion Aside, Christmas Gains Popularity in Communist Vietnam

Increasingly wealthy Vietnamese embrace holiday because of its non-religious glamor, commercial appeal More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Decision on Cuba Underscores Divisions Among Miami Cubansi
X
Sharon Behn
December 19, 2014 9:34 PM
For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video US Decision on Cuba Underscores Divisions Among Miami Cubans

For decades, older, more conservative Cubans have been gathering at Café Versailles on the corner of Calle Ocho to eat Cuban food and talk politics. After hearing of President Barack Obama’s decision, a number of them gathered in front of the café with posters to protest. VOA's Sharon Behn reports on the situation.
Video

Video Three Cities Bid for Future Obama Presidential Library

President Barack Obama still has two years left in his term in office, but the effort to establish his post-presidential library is already underway. The bid for the Obama Presidential Library is down to four locations in three states -- New York, Hawaii, and Illinois. As VOA’s Kane Farabaugh reports, each of them played an important part in the president’s life before he reached the White House.
Video

Video Cuba Deal is Major Victory for Pope’s Diplomatic Initiatives

Pope Francis played a key role in brokering the US-Cuba deal that was made public earlier this week. It is the most stunning success so far in a series of peacemaking efforts by the pontiff. VOA religion reporter Jerome Socolovsky has more.
Video

Video Fears of More Political Gridlock in 2015

2014 proved to be a difficult year politically for President Barack Obama and a very good year for the U.S. Republican Party. Republican gains in the November midterm elections gave them control of the Senate and House of Representatives for the next two years -- setting the stage for more confrontation and gridlock in the final two years of the Obama presidency. VOA National Correspondent Jim Malone has a preview from Washington.
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.

All About America

AppleAndroid