The Russian economy crises got worse in the year 2016. However, the year 2017 has seen a lot of positives for the Russian economic growth. The Putin economy strategy, despite criticism, seems to be working for the country.
The forecasts are pointing to the end of the recession continuing from the year 2017. The inflation is gradually coming down, helping stabilize Russian economic growth. The Putin economy strategy of diversification seems to be working for the time being.
Despite Russia’s economy up and down, the country’s overall outlook remains positive. One shining example of a bounce back from Russia’s economy up and down is car sales. Car manufacturers say that despite EU-Russian sanctions, car sales may increase by 5% in 2017. The car makers say that for the growth to take place, Russian currency must remain stable with low inflation.
Russian Economy After World Economy Collapse 2016
The Russian economic crises of 2016 took place because of many reasons. The stunt in Russian economic growth is a result of the EU-Russia sanctions on the country.
Similarly, the taxation on the oil and gas industry directly impacts the Russian economic growth. Russia’s economy up and down is also because of its dependence on the oil exports. The global decrease in international oil prices has had an adverse impact on the Putin economy. Russian economic crises grew worse due to the sudden dip in oil prices.
One of the burdens onto Russia is an increase in its military spending over the years. The end economic benefit of military spending will take the time to show up on Russia’s overall GDP figures. The industrial sectors which associate with the military in one or the other will eventually see the benefits.
Despite the EU-Russian sanctions, the country does not follow a socialist welfare economic model. The move to capitalism or open economy has given a lot more opportunities to Russia to explore possibilities abroad. The entrepreneurs can choose to work in industries as per the demand and supply forces of the market.
The year 2017 has given new hope to the Russian economy. The sudden fall in oil prices has made country’s policy makers think of other ways to diverse their economic interests. The Central Bank of Russia earlier predicted that Russia must focus on diversifying its economy. The head of Central Bank of Russia warns that Elvira Nabiullina warns that Russia may not see oil prices rising to previous high levels. Similarly, in June 2016, Russian President Vladimir Putin has also said that Russia must look to diversify its economy. All such indicators point to the fact that Russia will diversify its economy.