sanctions against Russia will negatively affect most economies of the world – Kommersant

Economic sanctions imposed against Russia could negatively affect most of the world’s economies, said in the World Trade Organization (WTO) World Trade Report 2023. The organization also warned about the risks of fragmentation of the world economy and its division into blocs due to the imposed restrictions.

“Even bilateral trade tensions can reduce economic growth in countries with highly integrated economies. For example, it found that trade tensions between China and the United States resulted in a welfare loss of 0.3% of GDP in China and 0.1% of GDP in the United States,” the organization said in its report.

Likewise, the sanctions imposed on Russia after the outbreak of the Ukrainian conflict “will have a negative impact on most economies.” Russia will face the largest drop in real GDP, the organization noted in the report.

The report said that tensions typically affect only a few countries, initiating a break in trade ties. The remaining countries may remain neutral or join some of the seceding economies.

The organization warns that increased unilateral trade measures threaten the future of the global economy and could lead to its fragmentation.

The WTO notes that developed countries would lose 3% of their GDP between 2020 and 2050 in the event of an all-out economic war between East and West. Least developed countries will lose about 6.5% of GDP compared to 2019. The organization clarifies that this scenario assumes that all economies join an autonomous East or West trading bloc, imposing higher trade barriers on the other bloc. However, if some economies take a neutral position, the average loss will be 2.8% in 2050.

The Russian authorities have increased their economic growth forecasts several times in 2023. In July, the Central Bank raised expectations from 0.5-2% to 1.5-2.5%. The Ministry of Economic Development stated that GDP would increase by 1.2%, and the head of this ministry, Maxim Reshetnikov, spoke in August about possible growth of over 2%.

More details in the text “Kommersant” “Optimists increase GDP”.

Petr Buzlaev