In connection with the introduction of Western sanctions against Russia in the coming months, “very likely” the default of Russia on sovereign debt, President of the German Institute of Economic Research (DIW) Marcel Fratzscher said.
“Hard penalties introduced by the world community for invasion of Ukraine significantly increase the risk that Russia will not be able to serve its obligations to international investors,” said Frazère in an interview with DPA.
According to him, the Russian state has rather minor external debts.
Frazère explained that, thanks to the export of oil and gas, Russia reached a highly positive trade balance, but due to sanctions lost free access to cash reserves.
Head DIW noted that the Russian default in turn could lead to shocks in the global financial markets: “I am afraid that this conflict will spread to the global financial system in which Russia and its partners will try to cause shocks and harm the Western economy.” / P>