Carnegie Moscow Center
Twenty years after Russia cast off its Soviet economic model, its central bank is still struggling to keep inflation under control. To moderate price increases, the central bank must clarify its approach to monetary policy.
In spite of predicted growth in 2011, the Russian economy faces a number of serious challenges as it recovers from the global financial crisis.
In 2001, analysts at Goldman Sachs came up with the acronym BRIC (Brazil, Russia, India, and China) as a way to promote investment in emerging markets. But the acronym has taken on a new meaning since then, and the four countries have started using it to pursue their own political ambitions.
Russia’s economic performance exceeded expectations in 2010, but inflation continues to worry policy makers. While they are attempting to curb rising prices, they are avoiding other necessary reforms for fear of inciting protests as elections approach.
While the obsession with global rebalancing stokes currency and protectionist tensions, it diverts attention from what is really needed—reforms at home.
The IMF and other Western institutions played a marginal role in the Russian default of 1998. However, working with the IMF was instrumental in teaching Russian authorities how to think through problems more comprehensively.
Russia is both a resurgent power on the international stage and a key partner for Europe. However, the country still faces a myriad of social and economic challenges.
Russia’s economic fortunes often determine the popularity of its leaders, and the personality of those leaders, in turn, influences the country’s socio-political development.
Confronting the global challenges in 2011, from the ongoing war in Afghanistan and a rising China to continuing international economic turmoil, will require an understanding how much has changed and the extent to which the center of gravity in global power has shifted.
Russia’s GDP is expected to grow at low rates the next two years and the country's budgetary outlook remains uncertain, while recent riots and violence suggest that the country’s political situation is deteriorating.