Russians’ consumer activity has significantly slowed down in the past six months, from 9.8% in February to 5.6% in June, RBC reports.
The continuing Western sanctions are restricting Russia’s access to technology, finance and world markets and thus having a negative impact on the economic growth, according to AMarkets Analytics Director Artem Deev.
The lowering international demand for Russian goods and services is also hindering economic growth.
Investors are reluctant to invest in the Russian economy due to uncertainty and risks pertaining to the sanctions and geopolitical tensions. The inflation in Russia remains at above the target level, pulling down consumer activity and aggravating costs for businesses, the expert adds.
“Many economists expect that the Russian economic growth will slow down further in the mid-term as the sanctions and the geopolitical tensions persist. Stimulating economic growth requires structural reforms to improve the investment climate, developing innovation, boosting the effectiveness of public administration and other measures. Russia must focus on developing exports to the countries with which it enjoys close economic links – in particular, Asia, Africa and Latin America,” Artem Deev believes.