Russian recovery is coming with rapid growth unlikely

Subject

Short- and longer-term prospects for recovery in Russia.

Significance

In April, Russia's economic development minister, Alexey Ulyukaev, predicted that Russia's recession was about to end. The Central Bank of Russia (CBR), previously more sceptical, came to the same view in late May. Policymakers are focusing their attention on the longer-term issue of whether Russia can achieve more than very sluggish growth over the next few years.

Impacts

• The prolonged dip in living standards will persist, although protests will not be serious enough to destabilise the government.
• The economic development ministry has a plan to increase funds available for investment, in part by prolonging caps on wages and pensions.
• Such a move would increase the risk of unrest and dampen consumer demand.