Putin, in a campaign speech in early March, focused on domestic issues, pledged to cut the nation’s poverty rate in half over the coming six-year term and turn Russia into a world top-five economy.
“This is a complicated task, but I am sure that we are ready to accomplish it,” the president said.
This is something the Kremlin needs to address in the coming years “or risk upsetting the stable socio-economic balance,” according to a report by Macro-Advisory Partners. Putin also hinted at political liberalization — a claim on which observers are highly skeptical, particularly given that recent months have seen hundreds detained and arrested in opposition protests and rallies.
In terms of external variables, commodity prices and Western sanctions remain the most important influences on Russia’s economy, although Moscow is now less reliant on oil revenues than it was when prices plummeted in 2015.
New sanctions may be on the horizon in the wake of Russia’s alleged nerve agent attack on a former spy on U.K. soil, which has further poisoned relations with the West amid the worst tensions since the Cold War.
In the longer-term economic picture, J.P. Morgan’s Amoa said, “We are yet to see meaningful reforms that would boost potential growth, so the story for now remains one of a cyclical rebound with potential for fiscal stimulus.”