International Monetary Fund (IMF) Executive Director Kristalina Georgieva (L) and US Treasury Secretary Janet Yellen meet at the Treasury Department in Washington, DC, on July 1, 2021.
Nicholas Kamm | AFP | beautiful pictures
Finance Minister Janet Yellen said that Russia’s war against Ukraine has weakened the country’s economy and slowed the country’s growth prospects for the foreseeable future.
“The Russian economy is expected to contract this year and next,” Yellen said on Thursday ahead of a meeting with European economic officials at the International Monetary Fund and the annual meeting of the Bank. World Store in Washington, DC.
Historic sanctions imposed by the United States, the European Union and its allies against Russia for its unprovoked invasion of Ukraine have separated the country from Western capital markets with the larger goal of being deprive the President of Russia. Vladimir Putin Yellen said the revenue he needed to fund the fight.
“Lost investment, including hundreds of private sector companies that have left the country and are unlikely to return, and restrictions on Russia’s real economy will create a drag on Russia’s growth prospects for many years to come,” she said in comments published by the ministry.
The Secretary of the Treasury chaired a meeting with Valdis Dombrovskis, European Commission executive vice president and trade commissioner, and Paolo Gentiloni, European economic commissioner.
Russia’s Gross Domestic Product expected to fall 6.2% this year and 4.1% in 2023, according to the Economist Intelligence Unit. Agathe Demarais, the unit’s global director of forecasting, told CNBC in September that it’s “huge by both historical and international standards.”
The EIU also said a European boycott of Russian oil would further deplete the economy. The energy sector accounts for about a third of Russia’s GDP, including half of total financial income and 60% of exports, CNBC reported.
Yellen and Deputy Treasurer Wally Adeyemo are on the move Strategic price cap of G-7 on Russian oil at IMF meetings this week as an effective method of denying the Kremlin income to continue the war against Ukraine.
According to Yellen, the sanctions also make Russia dependent on “last resort providers like Iran and North Korea”.
“At the same time, we have provided a record amount of both military and economic assistance to Ukraine,” she added.
