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The economic sanctions imposed by the United States and European Union on Russia are having a crippling effect. The economic sanctions are focused on Russia's key defense, energy, and financial service sectors, and include asset freezes, controls on financing, restrictions on access to capital markets, controls on dual-use items, and controls on goods and services for the Russian military. The sanctions' impact isexacerbated by the near 50% slide in crude oil prices, as Russia is the world's second-biggest exporter of crude oil and it relies on oil sales for almost half of its domestic budget. Severely impacted by the one-two punch of sanctions and sliding oil prices, the Russian economy shrank 0.5% in November 2014, the first contraction in five years.Here are a number of negative effects that economic sanctions (and sliding oil prices) are having on the Russian economy:

The Bottom-Line

Given the number of risks facing the Russian economy in 2015, investors would be well advised to avoid the region and look elsewhere for investment opportunities.

Originally posted here:
How US & European Union Sanctions Are Crippling Russia