Bilateral economic and trade relations entered a fragile era after Turkey downed a Russian Su-24 warcraft which violated its airspace after repeated warnings in November.
On January 1, Russia began imposing restrictive measures on some services and imports from Turkey. However,this situation could hurt both countries.
Customs and Trade Minister Bulent Tufenkci said that the decline in bilateral trade volume between Moscow and Ankara is not something new. For this reason, the effects of Russian sanctions on Turkey will be limited.
“When we look at our trade with Russia, there was a decline of 38-40 percent in 2015 compared with 2014.”
After the downing the Russian jet, “There was an additional 38 percent decline. With the multiplier effect, the real decline is around 11-11.8 percent. Looking at the size of our economy, we believe this decline will not affect us to very large extent,” he added.
The Russian Central Bank said that the newly imposed sanctions on Turkey may add between 0.2-0.4 percentage points to Moscow's inflation rate by early 2016.
"Much will depend on the speed and efficiency of organising alternative supply of the banned import products," the central bank said in a statement.
The Russian economy has been crippled by recession driven by external factors such as Western sanctions and low oil prices.
“Low oil and gas prices, geopolitical tensions and ongoing international sanctions deepen recession in Russia. The growth outlook for Russia in 2015-2016 is negative, with the economy expected to contract by 3.8 percent in 2015,” reported the World Bank.
On December 30, the Russian ruble fell to 73.2 rubles per dollar, marking the lowest in a year against the US dollar.
Turkish goods had become more vital for Russia after it banned imports from the West in retaliation to sanctions imposed after Moscow annexed Crimea.
In 2014, the trade volume between Russia and Turkey stood at $31.2 billion.
Having imposed sanctions on one of its key markets- Turkey, the decline in trade now hurts Russian businesses.
"There are some industries, such as, the tourism industry, which is highly dependent [on Turkey], where the limitations are most noticeable, but for other industries, the volume of products imported is very high,” Russian Economic Development Minister Alexei Ulyukayev said in an interview on Russia 24 News channel.
According to recent reports, the retail prices of fruits and vegetable in Russia already began showing a peak. But experts say the effects of the sanctions are yet to show.
Ria news agency reported that the Russian Ministry of Economy said prices of cucumbers and tomatoes will be more expensive due to upcoming regulations.
The Federal Antimonopoly Service of the Russian Federation (FAS) has warned manufacturers of “unreasonable” increase in prices.
Fresh Fruits and Vegetables Exporters Union Chairman Mustafa said “The effect of the embargo will be seen more in the second week of January. Retail prices in Russia may increase. In addition, the price is higher in Russia than in Europe. Because customs duties and transport costs are higher than in Europe.”
There are several produce banned in the newly imposed Russian sanctions however, larger Turkish exports such as textiles, lemons and nuts were among the only products excluded.