Russia will not get a second miracle out of this oil slump | The National

Russia will not get a second miracle out of this oil slump | The National:



"Russia seems to experience an oil-triggered economic crisis every decade or so. The 1986 price slump led to the fall of the USSR, US$10 per barrel oil in 1998 derailed the tentative post-Soviet recovery and brought the unknown Vladimir Putin to prominence, while Russia scraped through the short price slump following the 2008-9 recession.



This year, both the oil price and the rouble have beaten Mr Putin to 63 – his birthday is next October, while Brent crude was $60.70 per barrel on Friday and the rouble touched lows of 77 to the dollar on December 16.



It is worth recalling what happened after 1998. The Russian economy rebounded surprisingly quickly. Elected president in 2000, Mr Putin initially followed a prudent and orthodox macroeconomic policy, improved tax collection and accumulated “rainy day” savings. Helped by rising oil prices and lower domestic costs because of the weaker rouble, the oil industry revived and grew strongly up to 2004. Apart from 2008’s economic crisis, production has increased every year since 1999."



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