Nezavisimaya Gazeta: Month-long ‘invasion’ hysteria proves costly for Russia, Ukraine
Mounting military and sanctions-related hysteria around Russia and Ukraine has proved costly for both countries. Both the Ukrainian and Russian economies are suffering from rising inflation rates, currency depreciation, stock market crashes, and foreign investors fleeing from government stocks, Nezavisimaya Gazeta writes.
The current discussions about the threat of a military conflict between Russia and Ukraine are negatively impacting the economies and financial markets of both countries, experts say. Macroeconomic Analysis Chief at Finam Olga Belenkaya pointed out that Ukraine’s hryvnia had lost 8.4% of its value between early November and last Friday, while the Russian ruble lost 8.1%. The weakening currencies are creating conditions for a further rise in inflation and compel central banks to pursue a tougher monetary policy, thereby hindering economic growth, the expert added.
However, the damage from the rising political tensions to the Russian and Ukrainian economies is not equal, TeleTrade Chief Analyst Pyotr Pushkarev noted. “As for Ukraine, investors are massively abandoning plans related to the real sector of the economy, yet in Russia, it’s the stock market that funds have been withdrawn from. That means that only the share of foreign capital in Russia’s financial instruments has declined,” he explained.
Ukraine’s financial system is experiencing more damage, Pushkarev went on to say, adding that if the conflict continued to mount and there were no additional monetary infusions, then the Ukrainian economy would hardly be able to survive the standoff for more than a few months.
Talk of tough sanctions against Russian oil and gas exports is nothing but political rhetoric. A ban on energy imports from Russia would be suicide for the European economy. The uncontrolled rise in energy prices that would follow these sanctions will lead to a global crisis, Rossiyskaya Gazeta writes, citing market experts.
Director of the National Energy Security Fund Konstantin Simonov points out that there aren’t any large amounts of oil and gas freely available on the global market. Without Russian hydrocarbons, prices will soar. Saudi Arabia won’t rush to save the United States and Europe by increasing production and in fact, it’s not capable of making up for such shortages. The only remaining option is Iran, but the country has long been under US sanctions and doesn’t have infrastructure facilities to supply energy to Europe. Sanctions against Russia will push the global economy to the brink of disaster, the expert emphasized.
A ban on hydrocarbon imports from Russia will lead to a situation where gas prices at about $1,000 per 1,000 cubic meters would seem low. At the same time, the price of oil and oil products will double, Deputy Director General of the National Energy Institute Alexander Frolov noted. According to him, while only China turns a blind eye to the ban on oil imports from Iran, all of Eurasia will ignore the ban on energy imports from Russia.
That being said, experts believe that tough measures are unlikely to be taken against Russia’s oil and gas industry. All the painless options for sanctions have already been used and the only thing left to do now is to discuss restrictions that will cause more harm to the countries who impose them, Executive Director of the Capital Market Department at Univer Capital Artem Tuzov noted.
from TASS news agency
We remind our readers that publication of articles on our site does not mean that we agree with what is written. Our policy is to publish anything which we consider of interest, so as to assist our readers in forming their opinions. Sometimes we even publish articles with which we totally disagree, since we believe it is important for our readers to be informed on as wide a spectrum of views as possible.
