The Russian economy could be at zero growth this year due to the Ukrainian crisis. This was admitted by Anton Siluanov, Moscow's finance minister. Siluanov said the country is facing "the most difficult situation since the 2008 crisis".
Russia – explained the minister – has already witnessed a flight of capital worth 63 billion dollars in the first three months of 2014. The cause may be the geopolitical instability of the region.
"GDP growth has a rather low estimate, 0,5% - Siluanov said during a government meeting - Maybe it will settle around zero".
The slowdown in growth is also linked to dependence on energy exports and an economy that needs to be modernised. Over the past three years, economic growth has dropped from 4,3% in 2011 to 1,3% in 2013.
And then there's the annexation of Crimea, it will push up public spending. Prime Minister Dimitri Medvedev recently promised the people of the peninsula that the government would increase wages and pensions, as well as investments in infrastructure. However, the finance minister warned the prime minister against excessive spending in the region, declaring that the announcements had been made "without an analysis of the real needs of the area".
