The economy of the world’s biggest energy exporter is heading for its deepest slump in more than 10 years due to the fallout from the coronavirus. A bigger crisis may be just around the corner.
Analysts at the Kremlin-funded Skolkovo Energy Centre warned this month that the nation faces years of economic stagnation as demand for its carbon-heavy exports gradually drops. If Russia doesn’t adapt, budget receipts will "decline drastically” and growth may be limited to less than 0.8 percent a year for the next two decades, less than a third of what the Economy Ministry is targeting.
President Vladimir Putin has relied on high oil prices as a backstop for economic growth — and his own popularity ratings — for most of his two decades at Russia’s helm. Now forecasters expect that the coronavirus recession will accelerate the decline in global fossil fuel use, with some even predicting that the peak was in 2019, about 15 years earlier than the Kremlin was expecting.
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