In spite of Thursday’s cease-fire agreement between Kiev and Moscow, the Russian economy is still struggling amid swingeing sanctions, oil price declines, a weak ruble and rampant inflation. And ordinary Russians are feeling the pinch – with some believing the crisis hasn’t even started yet.
Russia’s economy has been hit hard by the severe decline in global oil prices and sanctions imposed on the country for its part in the Ukraine conflict. This, in turn, has caused the currency to weaken 90 percent against the dollar over the last 12 months, further pushing up the rate of inflation which stands around 11.4 percent. Russia’s economy is expected to enter recession this year.
“I can say that we have not yet seen the full effect of the economic crisis – redundancies, closing businesses, rising non-performing loans – we haven’t seen those things yet but that’s not to say it’s not coming,” Vladimir Tikhomirov, chief economist at Russian financial services firm BCS Financial Group, told.
Russia’s leaders have been keen to absolve themselves of responsibility for the economic crisis, blaming the decline in oil and “external factors,” as Putin called them, for the crisis.
Russia’s Finance Minister Anton Siluanov told this week that reforms were desperately needed in order for Russia to recover.