In an indication of how quickly the world is changing, most economic and finance specialists now believe US sanctions against Russia will be lifted or eased next year.
The U.S. will start easing its penalties, imposed over the showdown in Ukraine in 2014, during the next 12 months, according to 55 percent of respondents in a Bloomberg survey, up from 10 percent in an October poll. Without the restrictions, Russia’s economic growth would get a boost equivalent to 0.2 percentage point of gross domestic product next year and 0.5 percentage point in 2018, according to the median estimates in the poll.
Donald Trump’s surprise election in November is feeding expectations of a sea change in U.S. policy even after the European Union this week rolled over its economic penalties against Russia for an additional six months. While Trump has given no indication of how he plans to follow up on promises to mend ties with Russia, his chief of staff this month didn’t confirm if the restrictions will be kept. Meanwhile, the U.S. Treasury Department on Monday added more people and entities to its existing sanctions.
“It’s still a toss-up whether the U.S. will ease sanctions quickly, with the EU lagging, but the direction of travel is toward easier sanctions or less enforcement, which could reduce financing costs,” said Rachel Ziemba, the New York-based head of emerging markets at 4CAST-RGE. “We think the macro impact would be greater in the medium term than short term as it facilitates a rate easing trend that is already on course. In the longer term, it gives more choice of investment.”
This is remarkable coming from Bloomberg, a thoroughly neocon, anti-Russian outlet. In point of fact, they could be vastly underestimating the speed with which sanctions against Russian may be lifted.
After all, these are the same “experts” who completely failed to predict Trump’s win in the first place. And Trump’s nominee for Secretary of State, Rex Tillerson, has been a vocal opponent of sanctions as the CEO of ExxonMobil.
One thing seems certain: US-Russian relations, both political and economic, are in for a sea change.