Monday, September 08, 2008

Investors flee Russia

The Guardian notes that Russia's

victory has been undermined by an alarming flight of capital. Analysts estimate that, since the war began on August 8, $19bn (£10.7bn) has been withdrawn from the country.

The Kremlin is also facing other economic problems. They include a rapid drop in the oil price, which has fallen almost 30% from peaks close to $150 a barrel, and a 9.7% increase in inflation since the start of the year.

Analysts believe the war could become a catalyst for a more profound slowdown following at least seven years of unprecedented economic growth.

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