Across Russia’s political and business elite, there is a consensus that the economy is performing poorly and in urgent need of reform.
Last year, Russia finally emerged from a two-year recession caused by the slump in oil prices in mid-2014 and compounded by international sanctions. However, the growth outlook remains disappointing.
Worryingly for policymakers, Russia’s economic slowdown was already becoming evident in 2011-12, when oil prices averaged more than $100 a barrel and well before the West imposed sanctions.
Overall, in 2008-17 Russian GDP has grown at an average of only 1 per cent a year. At the St Petersburg Economic Forum last year, Alexey Kudrin, an adviser to the president, described the past ten years as a ‘lost decade’. Instead of using the global financial crisis as a stimulus for reform, the business environment deteriorated, and the state expanded further at the expense of private competition.