Does Standard & Poor's Monday announcement that it downgraded its rating on Russia's sovereign credit to junk status signal an impending economic disaster for Moscow? Probably not, although many analysts have warned that the announcement will only add to the nation's ongoing financial woes.
In its statement, S&P said the downgrade "reflects our view that Russia's monetary policy flexibility has become more limited and its economic growth prospects have weakened. We also see a heightened risk that external and fiscal buffers will deteriorate due to rising external pressures and increased government support to the economy."
The downgrade also means Russia's sovereign credit rating is now at that same level as Turkey, Indonesia and Barbados. But the move was far from unexpected. Another of the Big Three rating agencies, Moody's, also downgraded Russia's debt rating this past October but left it one step above a junk rating.
And Alexander Kliment, director of Russia and emerging markets research at New York-based political risk analysis firm Eurasia Group, noted that Russia's stagnating economy was in trouble even before its current woes began.
Right now, he said, three factors are combining to create a ruinous economic "perfect storm" for Russia: the oil price collapse, the ruble's drop and Western sanctions over the ongoing crisis in Ukraine.
According to the International Monetary Fund, oil currently accounts for about half of Russia's exports, as well as 45 percent of the national government's revenues. So, tumbling global oil prices not only dented Russia's economy but also negatively slammed the ruble, which S&P noted has dropped about 50 percent in value compared to a year ago.
"The sanctions exacerbate the problems posed by the oil prices and the ruble," Kliment told CBS MoneyWatch. "The sanctions make it difficult, if not impossible, for Russian companies to raise new capital, to attract new investment."
But despite this trifecta of challenges for the Russian economy, as well as the S&P downgrade, Kliment thinks a Russian sovereign debt default is unlikely.
"Russia's sovereign debt is a very small percentage of GDP," he noted. "They do still have almost $400 billion in reserves." However, Kliment added, a lot of those funds will probably be used this year toward recapitalizing Russian banks, supporting the ruble and helping companies pay back their foreign debt.
On top of all that are the geopolitical risks that a worsening Russian economy could bring.
"Putin really sees the Ukraine crisis as a proxy for a larger conflict with the West in general, and with the U.S. in particular," Kliment says. "As the economy gets worse and it pushes Putin to make more dramatic shows of defending Russia's interests ... it raises the risks that Russia takes more unpredictable actions geopolitically."
And while America's economic relationship with Russia may be limited, Kliment warned that Moscow could lash out against U.S. companies, investors and interests in unpredictable ways. Said Kliment: "Calculated unpredictability is one of Putin's specialties."