The economic and financial crisis in Russia – background, symptoms and prospects for the future

Abstract:

The crisis in Russia’s financial market, which started in mid-December 2014, has exposed the real scale of the economic problems that have been growing in Russia for several years.

Over the course of 2014, Russia’s basic macroeconomic indicators deteriorated considerably, the confidence of its citizens in the state and in institutions in charge of economic stability declined, the government and business elites became increasingly dissatisfied with the policy direction adopted by the Kremlin, and fighting started over the shrinking resources.

This situation is the result of the simultaneous occurrence of three unfavourable trends: the fact that the Russian economy’s resource-based development model has reached the limits of its potential due to structural weaknesses, the dramatic decline in oil prices in the second half of 2014, and the impact of Western economic sanctions.

• Primary Source

ESO: Background information: The Russian economy. Will Russia ever catch up? http://www.europeansources.info/record/the-russian-economy-will-russia-ever-catch-up/

ESO: Background information: Amendment to the Russian budget for 2015: an attempt to maintain the status quo http://www.europeansources.info/record/amendment-to-the-russian-budget-for-2015-an-attempt-to-maintain-the-status-quo/

---