Russian Economy’s Road to Recovery

Russian economy

It has been three years since the Russian economy entered a disheartening recession. Since then, things turned from bad to worse and every single day became a struggle to make ends meet. Clearly, the effect of falling oil prices has weighed in heavily to the ability of the country to sustain growth and development.

Fast forward to May, 2017, the Russian economy seemed to find a cure to its long-time illness. Finally, it has entered the period of recovery after two long years of major catastrophe.

Trust the Process

Russians are breathing a sigh of relief now. Why not? Their economy has finally separated with the two year recession, which has brought serious problems in the entire country.

Last May, the international organization World Bank has announced that the Russian economy is on mend. The organization has projected a 1.3% expansion for the Russian Federation this year and to follow a couple of 1.4% acceleration in the next two years.

In 2014, the Russian economy has put its foot under the grave after entering recession due to a dramatic plunge in oil prices, which fell from over $100 per barrel to less than $30 per barrel, brought by the global glut.

Russia is known as one of the crude production powerhouses in the world and its economy depends largely on oil exports.

But with the government’s effective monetary and economic policy, coupled with a big rebound on oil prices, the Russian economy has completely repaired its road to recovery, although the economy still suffered a bit of stagnation and continuous tramp.

At present, oil prices has hovered back to above $50-level, thanks to the efforts of the members of the Organization of Petroleum Exporters to curb crude production to pump up oil prices and ease oversupply.

But more than that, the Russian Federation has incorporated a flexible exchange rate policy, bank recapitalization, and expenditure cuts to find an antidote to its economic lethargy.

It may take time for the Russian economy to fully recover but for now we should trust the process.

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