Russian Central Bank Examines Business Impact of Trade Wars Amid Tariff Disputes
New Scenario Looms as Tension Mounts:
Speaking at the "Economy Under High Key Rate" conference organized by "Vedomosti," Kirill Tremasov expressed concerns about potential escalations in the ongoing standoff, warning that a faltering Chinese yuan could have damaging consequences for Russia's economy.
According to Tremasov, the yuan's depreciation could boost the competitiveness of Chinese goods on the Russian market, which, with China being a significant supplier of imports, might pose risks for domestic producers. However, he pointed out that Russia, primarily exporting raw materials to China, is less vulnerable to yuan fluctuations.
Tremasov also highlighted the potential repercussions of a slowing global economy due to trade wars, decreasing demand for raw materials, and the subsequent impact on Russia's export revenues, exerting pressure on the national currency and presenting inflation risks. As Elvira Nabullina, the CB's head, stated, the cooling global economy due to trade wars poses a significant threat to the Russian economy.
While the direct effects of trade wars on Russia are minimal, the indirect impact, such as reduced global demand for energy and trade disruptions, are significant concerns. The Russian Economy Ministry anticipates the economy's growth to slow to 1.8% in a high-risk scenario, and inflation could rise to 8.2%. Additional pressures include persistent labor shortages, rising inflation, and the lingering economic isolation due to Western sanctions.
Catch the latest updates on our Telegram channel @expert_mag
Tags:
In light of the mounting tension, the potential consequences for Russia's business sector and finance industry could be significant, given the cooling global economy due to trade wars, as highlighted by Elvira Nabullina, the CB's head. Furthermore, the indirect impacts, such as reduced global demand for energy and trade disruptions, could add to the existing pressures, such as persistent labor shortages and rising inflation, aggravating the economic situation in Russia.
