Russian woman at a meat stall in the Smolensk market

Russia’s short-term resilience comes at a price

  • Ruble depreciation and reserve funds have allowed Russia to ride out oil price slump
  • Fiscal crunch will force austerity soon, including military spending cuts
  • Kremlin can wait for new U.S. president and Europe to cave on sanctions
  • Short-term focus on survival will deepen backwardness, isolation of Russian economy

The outlook for Russia’s economy is gloomy, and the Kremlin is clearly concerned about the possible political implications. But just how bad is the situation, and what might be the consequences?

Western analysts often overstate the severity of Russia’s economic crisis. This tendency has been pronounced in media accounts, which are often colored by a sensationalism that borders on wishful thinking. Especially noticeable is a failure to distinguish between the short-term fiscal crunch that Russia is facing, brought on by the collapse in oil prices, and the chronic structural problems of the country’s economy.

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Professor Stefan Hedlund
The short-term crisis was overcome through adroit monetary and fiscal management
read more about it in the report
What's inside
  • Ruble depreciation and reserve funds have allowed Russia to ride out oil price slump
  • Fiscal crunch will force austerity soon, including military spending cuts
  • Kremlin can wait for new U.S. president and Europe to cave on sanctions
  • Short-term focus on survival will deepen backwardness, isolation of Russian economy
Who will benefit?
  • Report is targeted to the decision makers in cross country manufacturing – suppliers, manufacturers, logistics.
  • Also considered useful for the administrative university facilities, to better understand the possibe effects of current decisions.
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