Russia would be lucky if it faces nothing worse than stagnation, Mr. Åslund writes in a comment to the Moscow Times. He does not believe in the Russian government’s confirmations about the healthiness of the economy. On the contrary, Russian GDP could plummet more than ten percent over the next 2-3 years, he writes. The world financial crisis could be a major blow to all sectors of the Russian economy. Mr. Åslund, a senior fellow of the Peterson Institute for International Economics, says that the banking system is in major problems with up to 200 banks threatened by bankruptcy. Similarly hard hit is the real estate development, with most large real estate and construction companies considered to be on the verge of bankruptcy. Commodity prices are likewise falling rapidly with both steel and oil prices having been halved. In addition, energy production is already stagnant, and export volumes declining. Russia’s crude oil exports fell by 5,9 percent during the first eight months the year, the researcher writes. “This year, Russian exports are expected to reach 500 billion USD, of which slightly over 80 percent consists of commodities. If next year the average export prices of commodities are little more than half of this year’s prices and volumes are only moderately smaller, Russia’s exports would shrink by no less than 40 percent, or 200 billion USD, which amounts to a staggering 12 percent of GDP”, the article reads. The economic crisis could have serious consequences both for social and political relations in Russia. Mr. Aslund believes however that the crisis could also bring positive change to the country. “[…] low oil prices are good for reform. The same is true of financial crises […] Russia’s economic problems are so severe that the country cannot survive the crisis without profound structural reforms.”
