How do you know Russia’s economy is in real trouble?
Russian media outlets stop talking about the Russian economy.
Russian President Vladimir Putin gestures, during a meeting with cultural figures at Chekhov museum in the Black Sea resort of Yalta, Crimea, Thursday, Aug. 14, 2014. (AP Photo/Sergei Chirikov, Pool)
The Economist summarized the state of Russian news Sunday evening:
Just as in Soviet days, state television does not report facts, it conceals them. The official picture is dominated by the war in Ukraine (fuelled by America), Ukraine’s economic collapse (ignored by America), and Russia’s achievements in sport, ballet and other spheres (envied by America).
Most Russian media are largely willing to toe the line drawn by the Russian government (with one major, persecuted exception), but Russian economic woes are plentiful and serious.
Russia’s national budget was based on oil prices staying around $100 per barrel — but oil prices have plummeted worldwide below $50 per barrel.
Russia’s currency, the ruble, lost 17.5 percent of its value against the dollar in the first two weeks of 2015 alone.
Double-digit inflation, bank bailouts and the failure of an interest rate hike have all led ordinary Russians to start abandoning their nation’s currency, and with Russia’s credit rating sinking, foreign lenders are getting less and less likely to help.
As the Russian government loses some 3 trillion rubles because of low oil prices and real Russian incomes shrink for the first time since Vladmir Putin came to power in 2000, the nation’s leadership could struggle to maintain public confidence.
The Russian bear has been backed into an economic corner — the results might not be pretty.
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