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The International Monetary Fund (IMF) is out with its latest World Economic Outlook document, and it features some bad news for Vladimir Putin. Their forecast growth for Russia in 2014 has been revised way downward from a not-so-hot 1.9 percent to a downright bad 1.3 percent. Growth for 2015 also took a hit.
Most notably of all, the IMF attributes this pretty directly to the ongoing crisis in Ukraine. The way they put it is that "investment had already been weak, reflecting in part policy uncertainty" which has been aggravated "by the fallout from recent developments in Russia and Ukraine and the related geopolitical risks."
Basically the IMF thinks investment capital for Russian businesses may dry up. Some of that will be due to sanctions, but a lot of it is simply the existence of a crisis atmosphere. Foreigners are going to be reluctant to put money into Russia as long as it's beefing with its neighbors and major world powers, while wealthy Russians will be looking to park assets in safe harbors outside the country's borders.
Of course the bad news for Russia isn't necessarily good news for the new Ukrainian government in Kiev. The IMF didn't even try to forecast the likely course of Ukraine's economy, deeming the situation simply too unstable to be worth taking a pass at. Armed conflict tends to be zero sum, so events that hurt Russian prosperity could be even worse for Ukraine and still leave Moscow with the upper hand.
