World

Russian economy to shrink 35% due to Ukraine invasion sanctions, JPMorgan says

JPMorgan said Thursday that it expects Russia’s economy will come to a virtual halt due to global sanctions against the country for its invasion of Ukraine.

The Wall Street firm expects Russia’s gross domestic product to contract by 35% in the second quarter of 2022 and 7% for the full year, a dramatic slowdown comparable to the financial crises of 1998 and 2008.

“Sanctions and decisions of foreign businesses to pause or halt Russia operations have led to a stall in international trade, reduced output, and supply-chain disruptions,” JPMorgan strategist Anatoliy Shal wrote in a note to clients entitled “Russia: A sudden stop.”

“The shock implies a lower potential output, which will be accompanied with a spike in prices, a credit crunch will add to pain, although there are signs that the run-on banks is easing,” Shal added.

On top of the economic issues, Biden has also announced new visa restrictions on certain Russian oligarchs, their family members and close associates, which represents another step aimed at punishing allies of Russian President Vladimir Putin for waging a war in Ukraine.

“These oligarchs are known to direct, authorize, fund, significantly support, or carry out malign activities in support of Russia’s destabilizing foreign policy,” the White House said in a statement on the measure.

ARTICLE: PAUL MURDOCH 

MANAGING EDITOR: CARSON CHOATE

PHOTO CREDITS: GNNHD.TV

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Paul, 37, is from Scotland in the UK, but currently lives and works in Bangkok. Paul has worked in different industries such as telemarketing, retail, hospitality, farming, insurance, and teaching, where he works now. He teaches at an all-girls High School in Bangkok. “It’s a lot of work, but I love my job.” Paul has an active interest in politics. His reason for writing for FBA is to offer people the facts and allow them to make up their own minds. Whilst he believes opinion columns have their place, it is also important that people can have accurate news with no bias.

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