November 22, 2017
Thursday, March 20, 2014

Standard & Poor's sees 'negative' Russia outlook following sanctions

Russia''s President Vladimir Putin attends an annual congress of Russian Union of Industrialists and Entrepreneurs (RSPP) in Moscow on March 20, 2014.
International rating agency Standard & Poor's have lowered the outlook on Russia to "negative", due to a torrent of sanctions slapped on the nation from the United States and European Union during the current crisis in Crimea.

The country, which has a negligible foreign debt, retained its BBB grade in the eyes of S&P. However, the change in outlook means that the agency could move to reduce that rating in the short term.

"Geopolitical reaction to Russia's incorporation of Crimea could further reduce the flow of potential investment and negatively affect already weak economic growth, which would provide a further basis for lowering the ratings," S&P wrote in its report.

The agency added that it estimates that capital flight out of Russia will climb to around 60 billion dollars in the first three months of this year, roughly the same amount that left the country's borders throughout the entirety of 2013.

"In our view, there is a significant downside risk that growth will fall well below 1% if the uncertainties caused by the geopolitical tensions do not subside in the near term."

The modification comes after President Barack Obama approved a second round of sanctions on Russian officials and the Rossiya Bank, which aims to ratchet up pressure on Moscow for Vladimir Putin's decision to annex Crimea.

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Tags:  US  Russia  Ukraine  sanctions  S&P's  

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