ASSESSMENTS

In 2020, Russia's Biggest Enemy Will Be Its Own Economic Stagnation

Dec 2, 2019 | 10:00 GMT

Russian 1,000-ruble banknotes are printed at the Moscow Printing Factory owned by Goznak.

Russian 1,000-ruble banknotes are printed at the Moscow Printing Factory owned by Goznak. After an economic crisis from 2014 to 2017, Russia has pulled itself out of recession but still hasn't moved beyond economic stagnation.

(ARTYOM GEODAKYAN/TASS via Getty Images)

Highlights

  • Facing 2021 state Duma elections and 2024 presidential elections, Russia's leadership will try but struggle to pull the economy out of stagnation in hopes of gaining electoral appeal.
  • The Russian government has launched several large investment plans across many sectors, but bureaucratic bottlenecks and fear of inflation are stymieing their implementation and limiting the use of extensive government stimulus measures.
  • International pressure on Russia — mainly through sanctions — will remain steady but will not significantly increase in 2020 and will continue to limit Moscow's ability to force economic growth.

In 2020, Russia's internal focus will be its economic performance, as President Vladimir Putin's United Russia party strives to avoid challengers in upcoming elections in 2021 and 2024. Under economic stagnation, limited purchasing power has threatened the living standards of the Russian electorate and risks invigorating political opposition. Russia has launched numerous initiatives to reignite its economic growth, but the country is under significant external pressure and facing internal bureaucratic and systemic economic challenges, so their intended effects are not guaranteed....

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