Still, despite the light sanctions so far from Western democracies, Russia has suffered more than $50 billion capital flight in the first three months of the year, a nine percent ruble devaluation and a mild recession.
The military invasion and annexation of Ukraine’s Crimean peninsula in March, followed by Russia’s support of separatists in Ukraine’s southeastern regions, is spooking investors. Investors are seeking alternative places for their capital since Russian securities do not look too attractive in light of possible introduction of harder sanctions by the West.
The International Monetary Fund revised its Russia’s economic growth forecast for 2014, cutting it from 1.3 percent to 0.2 percent. By comparison, the IMF expects the Chinese economy to grow by 7.5 percent this year.