A Slowing Economy Tests Russia’s Tight Spending Habits

Sim Tack
Senior Global Analyst , Stratfor
Feb 27, 2020 | 10:00 GMT
This photo is a close-up shot of Russian ruble banknotes.

A close-up shot of Russian rubles. Russia’s weak economic performance in recent years has begun to weigh heavily on the country's living conditions and industrial capacity.


With 2021 parliamentary elections in mind, Russian President Vladimir Putin recently announced a package of broad social measures designed to boost consumer spending and, in turn, economic growth. But while the investments are notable, they fall short of more structural advances in infrastructure development and industrial stimuli needed to significantly improve Russia's dimming financial prospects. Accessing the funds needed to make such efforts effective, however, would require breaking away from Moscow's tried-and-true method of fiscal restraint, which has helped guarantee a rainy day fund for when things get tough (as they did most recently during the country's 2015 recession). But by keeping the economy stuck in a cycle of stagnation, maintaining this penny-pinching policy will come at the risk of degrading Russia's living conditions and industrial capacity -- and ultimately, its political stability and global standing....

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