Even if the economy recovers in the next few years, growth will be so slow that Russia’s share of world output will still shrink to the lowest level since the collapse of the Soviet Union, erasing the gains of President Vladimir Putin’s 15-year rule, he says.
Already, budget pressures forced the government to cut or delay parts of the 20-trillion-ruble military modernization that Putin has made a top priority in his drive to rebuild Russia’s global might…
This time, even the central bank’s official forecast expects the contraction to continue into next year, making this the longest recession since the one that followed the demise of the Soviet Union, and recovery is expected to be tepid once it begins.
“This crisis is a bad one because it’s going to last a long time,” says Sergei Kolesnikov, president of Tekhnonikol, a mid-sized maker of construction materials. He halted plans to build a new insulation factory, reflecting a 15 percent decline this year in domestic sales as builders slashed spending. Exports have increased thanks to the drop in the ruble, which has made his products cheaper in foreign markets, he says. Still, he’s not optimistic.