An escalation in U.S. sanctions against Moscow risks derailing a fragile recovery in Russia’s economy, which had just begun to take hold after the Kremlin’s last confrontation with the West in 2014, analysts and investors said on Monday. The United States imposed major new sanctions against Russia on Friday, striking at senior Russian officials and some of the country’s biggest companies in one of Washington’s most aggressive moves to punish Moscow for its alleged meddling in the 2016 U.S. election and other “malign activity”.
“One gets the impression that since 2014 we have been convinced that sanctions are painless for our economy,” said Kirill Tremasov, head of research at Loko-Invest and former director of the Russian Economy Ministry’s forecasting department. “This is completely groundless. What happened on Friday opens a new stage in relations with Western countries. We have found ourselves in a new reality. And it is very, very serious.” Analysts and investors in Moscow said the sanctions could consign Russia to years of low growth, frustrating government efforts to stimulate a rebound from a two-year downturn brought on by low oil prices and Western sanctions over Moscow’s role in the Ukraine crisis.