Posted on Jan 06, 2020
For the Russian economy 2019 was a less than impressive year, experiencing very weak growth, with no indication that the country will meet exceed the global average of 3% in the foreseeable future. The World Bank has issued projections of just 1.6% in 2020; and 1.8% in 2021.
EU and U.S. sanctions continue to bite, and the much vaunted Nord Stream 2 has stalled at the final furlong: Allseas, a Swiss-Dutch company that lays deep-sea pipe, has suspended work on the project just 100km from completion under intense pressure from the U.S.
Government economists currently describe the current situation as a period of “stability”, although “stagnation” might be a more apt term.
As the Moscow Times reported recently, "even Putin admits that the launch of large-scale national projects has yet to produce a noticeable effect on either the economy or the lives of ordinary citizens. Real disposable incomes have stagnated for the last five years, contributing to Russians no longer viewing stability as a good thing, according to polls".
Against a background of spurious court actions, the omnipresent and grasping tentacles of the Siloviki, and no separation of government and judiciary, foreign investment is lacking.
Putin's olive branches towards Ukraine - energy contracts and a highly controversial prisoner exchange - are viewed by most observers as nothing other than dialectical steps towards his eventual aim of taking Kyiv back into the Kremlin's sphere of influence.
However, it may also be the case that the cost of his military aggression, projects such as the Kerch Strait Bridge, all combined with the countless Billions that the Siloviki have plundered from the Russian economy, are now becoming unsustainable.
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