Vladimir Putin had his Jim Callaghan moment last week. Faced with questions about the state of the economy in the wake of the rouble’s freefall on the foreign exchanges, the Russian president said the problems would be overcome in two years. Echoing Callaghan’s words on his arrival back to the UK from a summit in Guadeloupe during the winter of discontent, Putin said it was not even fair to say Russia was in crisis.
Given some of the previous setbacks Russia has overcome, that may well be true. It is not like 1941, when the country’s very existence was in doubt. It is not like Stalin’s manmade famine in the Ukraine in 1932-3. But by the standards of the modern world, Russia is facing a crisis. Even before last week’s turbulence on the foreign exchanges, the central bank was expecting the economy to contract by 4.5% next year. A deep recession is unavoidable.
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