Fitch analysts note that tensions around Ukraine have increased the risk of conflict and more severe sanctions against Russia.

On February 9, 2022, the Kremlin commented on the collapse of the Russian economy because of Ukraine / Illustration REUTERS

The Russian economy will suffer serious damage even if it abandons plans to invade Ukraine.

This, according to RBC , was announced by analysts from S&P and Fitch rating agencies. 

Fitch analysts note that tensions around Ukraine have increased the risk of conflict and more severe sanctions against Russia. 

“Sanctions are likely to be in line with any action taken by Russia, which remains highly uncertain,” Fitch said in a filing. 

S&P also note that the aggravation of the situation with Ukraine and the prospect of sanctions are affecting the Russian economy: a ban on Russian banks to conduct transactions in US dollars, disconnection from the international SWIFT system, a ban on investors from owning Russian government debt obligations in the secondary market.

“Even if these highly negative scenarios do not materialize, the continued risk of severe sanctions is likely to limit the long-term growth prospects of the Russian economy and possibly make it less attractive to investors in the medium and long term, further weakening its integration into global economy,” S&P said.

How much Russia will pay for aggression:

In January 2022,  Bloomberg  reported that the sanctions that are applied to Russia due to the threat of a military invasion of the territory of Ukraine are causing serious damage to the Russian budget. Thus, according to analysts’ calculations, a ban on the purchase of Russian state debt by Western funds will cost Russia $10 billion a year.

Banning foreign participation in local government bonds would cost $60 billion. Termination of access to the Swift payment system will cost Russia 535 billion dollars a year.

On January 15, 2022, experts spoke about the consequences of tough sanctions for the Russian economy. Analysts believe that  in the event of an attack on Ukraine  and the imposition of US sanctions proposed by the Democrats, the outflow of capital from the debt and stock markets of Russia may approach the indicators of 2014-2015, and the ruble will lose up to 20%.

(C)UNIAN 2022