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