RT.com
14 May 2022, 18:13 GMT+10
The Wall Street bank predicts only a moderate recession due to sanctions
Russia's economy is coping better with Ukraine-related Western sanctions than could be expected, JPMorgan Chase said in a note to clients dated last week and made public on Monday.
According to the biggest US investment bank, business sentiment surveys from the country "are signaling a not very deep recession in Russia, and therefore imply upside risks to our growth forecasts." It also cited high-frequency indicators such as electricity consumption and financial flows, which signal that the economy is in better shape than predicted.
"The data at hand therefore do not point to an abrupt plunge in activity, at least for now," the bank's analysts state in the note, as cited by Business Insider.
JPMorgan also backtracked on its earlier forecasts of a 35% drop in Russian GDP in the second quarter and 7% for all of 2022, now saying the figures are likely to be much less alarming. The bank did, however, note that the impact of current and potential sanctions will be felt, and that the country's economy would be in far better shape if Moscow had not launched its military operation in Ukraine.
"The impact of sanctions will continue building in coming quarters, we expect. The GDP profile, therefore, looks increasingly likely to be consistent with a drawn-out, but not very sharp recession," the analysts predict, noting that export orders are showing a particular decline.
Russia has faced unprecedented economic restrictions since it launched a military operation in Ukraine, drawing intense condemnation from the West. The US has, among other measures, placed an embargo on Russian oil, one of the country's major export commodities, while the EU is currently preparing its sixth package of sanctions, and also considering an oil ban. Russia has been cut off from the SWIFT interbank messaging system, while banks, organizations and individuals have been sanctioned, and assets including half the country's forex reserves have been frozen. Russia has responded with countermeasures and managed to bring the national currency, the ruble, back to its pre-conflict level after a historic drop, but there is still much uncertainty among analysts as to the future of the economy.
For more stories on economy & finance visit RT's business section
(RT.com)
Get a daily dose of Argentina Star news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Argentina Star.
More InformationTIRANA, Albania: Following violent clashes between Dutch and Italian fans and the police ahead of this week's Europa Conference League ...
TOKYO, Japan: A new high-density electric battery developed in Japan has the potential to power electric airplanes, according to industry ...
ATHENS, Greece: After a sharp increase in attempted entries by migrants through its Aegean islands and land border with Turkey ...
HONG KONG: In his first public remarks since he was arrested under Hong Kong's National Security Law earlier this month, ...
MOSCOW, Russia: Following the closure of a number of Russian state news outlets in the West, this week the Russian ...
LONDON, England: A joint declaration to boost defense and security collaboration was signed between Britain and Lithuania this week. London ...
LONDON, England: UK officials are expected to approve a request by Shell Oil to develop a North Sea gas field, ...
MADRID, Spain: Hotels in Spain are seeing a rebound in tourism, increasing their rates by 36 percent in April over ...
NEW YORK, New York - U.S. stocks raced ahead on Friday, with technology shares leading the way on signs inflation ...
WASHINGTON D.C.: Due to seat-belt mechanisms that could explode and shoot out metal fragments in the event of a crash, ...
SEATTLE, Washington: Following the decision of McDonald's, Seattle-based Starbucks said this week that it will exit the Russian market after ...
SYDNEY, NSW, Australia - Stocks in Asia were stronger across the board on Friday, following a two-day surge on Wall ...