Due to sanctions and falling oil prices, the Russian economy is experiencing a protracted crisis. Weakened in this regard and the Moscow exchange, rubles and the whole country. This writes the journalist of the German edition of Die Welt Eduard Steiner.
The isolation of the country due to Western sanctions, long-lasting fear of new sanctions and structural weaknesses of the economyunder the control of hardliners and suffering from delaying reform by President Vladimir Putin – all this for a long time aggravates what is happening on the stock exchange is the largest country in the world, holding under pressure the ruble and prevent the national economy.
However, the chief of the Kremlin welcomed the economic situation.
Recently at an investment forum, he said that the economy adapts to the challenges and is confident, however, that is not enough to significantly increase the level of welfare. The first and third points are true, says Steiner.
And the second, about confidence and stability, raises questions.
“Although unemployment is less than 5%, while inflation is showing a historic low, less than 4%, annual GDP growth is likely to be a maximum of 1.8%. Thus, after the recession of 2015 and 2016 related to oil prices and sanctions, the economy is weak,” the article says.
In addition to internal structural barriers Russia continues to suffer from sanctions – continues the journalist.
Tougher sanctions from April and August and the threat of new sanctions hinder the urgently needed growth.
This burden not only spur inflation, but continues to put pressure on the ruble, which remained weak, despite the fact that until the beginning of October the price of oil was high. After the annexation of Crimea, the ruble has lost against the dollar by almost half its value”.
However, a real problem for the Russian stock market is that 2019 will be difficult from the point of view of macroeconomics.
According to the forecast HSE, GDP growth will slow to 1.3%. The main risks are the deterioration of the dynamics of exports, as well as, among other things, the increase in the VAT rate from 1 January.”
Previously, the oil went into decline and fell to a new “bottom”: the reasons. Oil prices fell to a new record in a year the economy of Russia outlined a big problem.