International tensions dent Russia’s economy

Russia’s economy is barely growing, inflation is rising fast, and capital is pouring out of the country, the Economy Ministry said yesterday, a sign that international tensions around Ukraine are already inflicting severe economic costs.

In February Russia’s gross domestic product eked out growth of just 0.3% year-on-year, down from 0.7% in January, Russia’s deputy economy minister Andrei Klepach said.

Last year the economy grew by just 1.3%, far below initial forecasts, but there had been hopes growth would rebound this year. Instead Russia’s economic performance is deteriorating further as the international tensions around Ukraine lead capital to flee Russia.