Will The Russian Economy Collapse?

Russian rubles. Wikimedia Commons/Petar Milošević

Sergey Aleksashenko, National Interest: Is Russia's Economy Doomed to Collapse?

Putin must undertake serious reforms to keep the country competitive.

“Russia is isolated with its economy in tatters,” said President Obama in his State of the Union address on January 20, 2015. At that time, many thought it was true: the Russian currency was in free fall, while the federal budget was losing its revenues and beginning to extensively rely on reserves accumulated in previous years, and so many experts predicted the collapse of the Russian economy—an economic decline of 10 percent or more, comparable to the 2008–09 crisis. But though the Russian economy plunged into a crisis and could not halt its decline for six consecutive quarters, the real scale of the economic shocks was significantly smaller. The fall in GDP was 3.7 percent in 2015, and most experts foresee a drop of around 1 percent in 2016. Oil prices’ rebound from their nadir allowed the ruble not only to stabilize, but to gain a foothold. A 10 percent fall in private consumption has not led to any visible increase in social tension.

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WNU Editor: The Russian economy needs reform .... correction .... a lot of reform. But collapse .... not in the foreseeable future. If there is an economy that we should be worried about, it is this one .... U.S. National debt jumps nearly $100 billion in one day to record high (Washington Examiner).