Two Economic Crises at the Same Time - Too Much Even for Russia

Abstract

Russia's economy is currently suffering from two simultaneous, partly interdependent crises. Since 2014, Russia has been prepared for one of them: an oil market shock for which it is partly to blame. However, Russia is only partially prepared for the simultaneous spread of the Covid-19 pandemic. Overcoming this crisis is becoming a systemic issue. More cooperation at the international level is desirable in the short term. Domestically, the Kremlin’s economic policy response remains modest. Companies and the middle class will help to overcome the crisis, while the government has yet to take meaningful action. The Russian leadership calculus could change if the Covid-19 fallout on the Russian economy becomes more predictable.