The World Bank assumes that the international community will refrain from imposing trade sanctions on Russia due to the Crimea crisis, the bank said in its Russian Economic Report.
The World Bank developed two alternative scenarios for Russia's 2014-2015 growth outlook in response to the higher-risk environment since political uncertainties around the Crimean crisis in early March 2014 led to increased market volatility. Both scenarios assume no trade sanctions will be imposed.
"The World Bank's low-risk scenario assumes a limited and short-lived impact of the Crimean crisis. The crisis could be contained in a peaceful fashion with some political tension remaining in 2014. In that case, the economic impact is expected to be limited with no trade restrictions introduced through sanctions," the report says.
The high-risk scenario "assumes a more severe shock to economic and investment activities from the Crimean Crisis. An intensification of political tension could lead to heightened uncertainties around economic sanctions which would further depress confidence and investment activities. Yet, this scenario assumes that the international community would still refrain from trade sanctions," it says.
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