Washington tightens Russia sanctions that aren't working
Gross domestic product added an annual 1.8 percent in the third quarter, down from 2.5 percent in the previous three months, the Federal Statistics Service said on Monday, citing preliminary data, which don’t include a breakdown.
...Capital Economics said the weaker-than-expected performance was probably caused by slow growth in industrial production, as well as one fewer working day in this year’s third quarter than in the same period of 2016. Adjusting for the calendar difference, the expansion reached 2.4 percent from a year earlier, according to Goldman Sachs Group Inc.
2.4% GDP growth isn't great, but it's nearly the same growth rate as the United States.
The failure of the sanctions don't stop there.
Russian government bonds are likely to remain among the favourite picks for global investors next year, despite possible sanctions and a dip in yields in line with falling interest rates, foreign market players say.
Russia is planning on selling bonds priced in Chinese Yuan, thus completely avoiding any sanctions.
There is also a potentially critical problem - one of our major allies is extremely unhappy with the sanctions.
Germany's economy minister, Brigitte Zypries, on Monday decried the US' latest round of sanctions against Russia, insisting that they violate international law by indirectly punishing European firms.
"The Americans cannot punish German companies because they are doing business in another country," Zypries told Germany's Funke media group. "Of course we don't want a trade war," she added, pointing out that the federal government had pushed "the Americans not to deviate from a coordinated approach to sanctions."
However, those calls were effectively ignored last week, after the US House of Representatives voted overwhelmingly in favor of imposing new sanctions on Russia.
The longer the sanctions don't work, the less possible influence they can have.
Modest changes in current sanctions are unlikely to do anything other than angering our allies.